Golf Club Atlas

GolfClubAtlas.com => Golf Course Architecture Discussion Group => Topic started by: Mike Bodo on June 07, 2019, 11:36:27 PM

Title: Private Clubs at a Crossroads
Post by: Mike Bodo on June 07, 2019, 11:36:27 PM
The article at the link below ties in nicely with the subject being discussed in a separate topic regarding golf membership networks and their potential impact on both how and where the game is played.


https://www.city-journal.org/country-clubs (https://www.city-journal.org/country-clubs)


With the baby boomer generation either aging out of the game or (sadly) dieing, where does this leave the remaining private clubs that still exist - many barely hanging by a thread at this time? Outside of the elite and many top-tier private clubs, will there be a mass closure of private golf/country clubs when the next recession hits or will some or many be saved by becoming aligned with reciprocal club networks or going the daily fee route?


I sense we are on the precipice of a major upheaval as it concerns the economic sustainability of the sport and can see a variety of different models fighting it out to reset the the clock and become the standard others follow. I certainly don't have the answers and neither it seems does anyone else despite the many topics and discussions had on this very subject in recent years. The problem the way I see it is that there is no one-size fits all solution and what successful plans clubs and their boards come up with will apply locally or regionally at best. That said, it would be good to hear from others regarding their thoughts on the article, in addition to their opinion on the fate of private clubs and what they see happening with this segment of the golf market in years' to come.
Title: Re: Private Clubs at a Crossroads
Post by: John Kirk on June 08, 2019, 12:41:19 AM
...
Title: Re: Private Clubs at a Crossroads
Post by: Jeff Taylor on June 08, 2019, 02:52:11 AM
That last sentence is the perfect summary of your post.
Title: Re: Private Clubs at a Crossroads
Post by: John Kirk on June 08, 2019, 03:38:09 AM
I came back in the middle of the night to remove that last sort of sentence.  I wrote that after an evening that would have frustrated most of us (three hours on the phone trying to fix something I didn't break), and it affected my mood.

We'll see how that prediction looks in 25 years.  Well, a few of us.

Just for grins, here's the total outstanding debt, according to the Federal Reserve of St. Louis bank.  About $72 trillion, up from about $5 trillion in 1980.  That's about $218k per person, up from about $22k per person in 1980.  $1 in 1980 is worth about $3.10 today (http://www.in2013dollars.com/us/inflation/1980?amount=1 (http://www.in2013dollars.com/us/inflation/1980?amount=1)), so that would say the increase in debt per person is 218/68.2 = 3.2.  Therefore, the average amount of debt per person has increased 220% in terms of real dollars over the last 40 years.

https://fred.stlouisfed.org/series/TCMDO (https://fred.stlouisfed.org/series/TCMDO)

$218k per person.  Who is going to spend money on golf?

I say the current incredible state of the game, with so many great courses and fantastic playing conditions, is ultimately unsustainable.


Title: Re: Private Clubs at a Crossroads
Post by: Mike Sweeney on June 08, 2019, 05:41:12 AM
Golf is a game and life is a game. You bob, you weave, and you adjust. As a consumer of golf, I love the changes that we have seen in golf, except for the distance issue of golf balls driven to silly distances that force existing courses and clubs to make expensive changes. That is silly/stupid. You have built 15,000 courses in the USA and roughly 30,000 worldwide. With a few simple adjustments, you can keep the ball in play and not have to add 500-1000 yards to perfectly fine designs. And yes, you can have more than one set of equipment specs, and more than one set of rules.

We tend to be drama queens around here about our golf clubs. It has been harder in the past!! In 1940, Richmond Golf Club (England) wrote this and the club is still here today:

(https://i.kinja-img.com/gawker-media/image/upload/s--f-_Cy2Ng--/c_fit,dpr_2.0,f_auto,fl_progressive,q_80,w_636/18loss5lzkfk8jpg.jpg)

Richmond Golf Club today:

(https://www.therichmondgolfclub.com/files/492/images/1b.jpg)

The people who allowed Richmond Golf Club to survive:

(https://img.apmcdn.org/e8f3d3d9ef9ef18879db4c83aa2d82d049e09880/uncropped/b8d4e8-20190605-d-day-75.jpg)
Title: Re: Private Clubs at a Crossroads
Post by: Steve Kline on June 08, 2019, 06:22:18 AM
How much of the country club issue is really just a demographic issue?


The baby boom generation was huge, leading to a massive expansion in the number and type (housing development/resort) courses. Generation X was much smaller. There really aren't enough of us to support any industry the way the baby boom generation did. Many industries and economies are starting to feel the effect of that very small generation now as we are in our 40's and 50's but we don't have the collective spending power of the previous generation.


However, the following generations are much, much larger. There will be enough of them to drive higher demand for all kinds of things, including golf and private country clubs. Yes, there is still another round of economic/societal turmoil to go through to resolve the debt issue. But, on the other side of that, there will be enough people demographically to support all kinds of things.
Title: Re: Private Clubs at a Crossroads
Post by: John Kirk on June 08, 2019, 08:40:33 AM

In my experience, the economics of building a new course and club don't really add up.  Even with a course that has been (eventually) paid for, a maintenance budget of $500k plus other basic administrative functions needs maybe $700-800k to run each year.  That means you need 500 members to pony up $1400-1600 per year each.  Or 200 members at $3500-4000 per year.
Title: Re: Private Clubs at a Crossroads
Post by: Mike Sweeney on June 08, 2019, 09:02:39 AM

There's a bigger problem for me.  I keep trying to participate, and I don't have anything nice or constructive to say anymore.  Sorry again for the invective.


John,


You will have to stand in line behind me for "stupid club memberships". :)


Your post is a good one, please leave it. On the other side of the pond, I joined Enniscrone as an Overseas Life Member for 2000 not-Euro, and there was no Euro back then!! Now it is 4000 Euro and for me, it just paid off with the dream Father & Son trip and Captain Andy and the local members treated us like any golf partner wants to be treated. One great decision in the middle of some bad ones:


(https://lh3.googleusercontent.com/YJZxtDEj9KwuwHqI2MjRAHwn1ZyrE6bDLpYG6I_E_TKM0AtMTJ7cEKaUiEUE8qV_PWEJO6it2Ddt2I1Ior7jEhaHhCG91gLGWbA1-Pkvoa4v5DkkLjTaU5OC6_xvDvQ7mVKS0AbGrxKrVonnJgBnzDY0qwVnIcQkvPEAz4CnMbcf3kSVuOSJ0wCTJHyVzwDS24CrLATo3XrhwyMsecvKnoh9Q6EHckhFT7wVGDGhbYvks6vIsFq5Bhl6HwraUUefJc9FuKqgr7DSbXY2jVES19am-QzbKFiOzg5hC67GjdmANOdaCGiHcGA_CkUBIHPMrD-sCHnUb4rUX4alkD4tE8nC4P1It8LxwGj0jLBcKhUZuPz4KVHAEeu5MOdTTLDbaRSJ-RuQYbwQEcSli-_7ciL21-hiHodoXWxzIwhKhRXBcrKDpIw7V3aa95j9YjyS4kpEhM6w5FJgpNmqHIK39L68YSNUDA47vayjS0uP0Qo2lClyRjSvY-4wtPIBrj-MzgLs2S3i8BLbFNBgg82T7SumA0RBLVtEDDURof8uQUysWxQx83vf38veOETq3--5kzNKmYkk0-w8AvlZHSCJdPCGjkE7w87JvoHnrCtlE_dY50Ws7lnV4W4LFAk2Y5NcRWkcMqMJbsf7ets60lIkxGiEgEzQ2xHNMdqwHyBBc86QCVIMr_Aanh5BMqhZPTXzt_z5FebK_dk00JvIItiL35FGLw=w2104-h1578-no)


(https://lh3.googleusercontent.com/YUYWxA43lewQTThnIYwYakZKb3hTSfJzIZlA2ucgNEc2QyNfzZsTzF_Szti1HvAGWiNjo6ibf-edYwdSDqlECjANBEUl5_fhqTbtji5AU6kf-xfD5PsIHKzyV7RkzBLrCsp11PHsGsDqYfJ6LUxRe_oFu-3w3D4YJ6z3TLQMVqhpbKVI6Q1k1A-h9jZVrJ3tsG9_3uEgcfkhOdCk-d4s2iBDzGz2OkE3z0XGesE3zAhh3skrqSWlpOp0FUe38-OBDdd_-yXijxT6_m6nXjotvZwGbJH83h0yBv-Xz-eT6XeCUXh6Amt9G87lNsM4Wksy74yjLzGrY3yCTHjP7ORC_VH-zS51XtrNBaROG9hGWDAOSBQresGylO4t1SEAHHrx18pCrjfIbpanX6dnqf4xuHk7QWtO3yOK4habODFPALioFzmrBzpU-IRcWwggJW74k2lpaTD84aWkvUMh5Y4wMSMO-7uXVL7fLJybVD61otKAbzgP1OVbZPebMF9FJUcjD9t07jaBC-Zg6FWNc2-dbmgGLsTtyiu1uTuTlkF5y5mD5lyTCydqu9tUBECR_aKp5DgxY9s6_mCCIB0PTen840hpr_ZPxykIZqPo5z9T-62DLFJqgotJnAE0mEB-dMZOsXXAvUV_7NR7WCewecR6f2cxnHjbXeNcJ56Di30HeNupvDL-mrN_1ZoloD6uvPGO9LIWPKjtYZTBVRqdevgsS_UYlg=w750-h1334-no)

Keep the faith!!
Title: Re: Private Clubs at a Crossroads
Post by: Philip Hensley on June 08, 2019, 11:30:24 AM
What evidence is presented in that article that proves the country club is dying? I must live in bizarro world, as the #1 complaint in my area is that country clubs have too many people! Too hard to get a preferred tee time at your own club, too many people at the club, etc.


The change of culture is what kept many of these country clubs open. Country clubs had to evolve and either become more family friendly, and not treat the rest of the family after Golfer Dad as afterthoughts, or cater to a younger single (non-married) male as a golf/social hangout. Most have gone the family route and are thriving.


The idea that all Millenials live at home with their parents while making $25k a year and have $100k in student debt and can't afford to do anything is a silly stereotype. None one making that kind of money (inflation adjusted) was going to be joining a country club regardless of the times.

How much of the country club issue is really just a demographic issue?


The baby boom generation was huge, leading to a massive expansion in the number and type (housing development/resort) courses. Generation X was much smaller. There really aren't enough of us to support any industry the way the baby boom generation did. Many industries and economies are starting to feel the effect of that very small generation now as we are in our 40's and 50's but we don't have the collective spending power of the previous generation.


However, the following generations are much, much larger. There will be enough of them to drive higher demand for all kinds of things, including golf and private country clubs. Yes, there is still another round of economic/societal turmoil to go through to resolve the debt issue. But, on the other side of that, there will be enough people demographically to support all kinds of things.


This is the real changing of the culture question in regards to private country clubs. If there really is a dying of country clubs, demographic change is the symptom, not the disease. The following generations being much, much larger than GenX doesn't matter if the people in those cultures are not interested in golf in general, and especially private golf. The demand and purchasing power of those generations will be directed elsewhere.
Title: Re: Private Clubs at a Crossroads
Post by: John Kirk on June 08, 2019, 12:54:36 PM
Here's a recent summary of United States golf industry figures:

https://www.thengfq.com/2018/05/ngf-issues-2018-golf-industry-report/ (https://www.thengfq.com/2018/05/ngf-issues-2018-golf-industry-report/)

Mike, my commentary isn't based on personal grievances.  Previous experiences with clubs that experienced foreclosure is water long under the bridge.  Besides, I wouldn't consider my own disappointments when making an opinion about macroeconomics.

My belief that the number of golf facilities and golfers will continue to decline is based of thermodynamics, that you need lots of energy to run a golf course, and that fossil fuel energy is becoming more difficult to discover and produce.  Using energy for golf is a low priority for a society, and therefore golf courses with high associated energy costs will be increasingly difficult to support.  It's hard to see because it happens so slowly.  But maintaining sufficient energy for society is a top security issue.


Like I said, I don't have anything valuable to add.  I've said all of this before.  Very few people agree with that analysis.  I predict a lot of suburban and urban golf course will be developed into smaller, affordable housing.


A few basic statistics comparing younger and older generations via Pew Research.
https://www.pewsocialtrends.org/essay/millennial-life-how-young-adulthood-today-compares-with-prior-generations/
Title: Re: Private Clubs at a Crossroads
Post by: Daryl David on June 08, 2019, 01:13:42 PM
It’s hard for people to relate to macro trends when we all live in our own micro world. A friend of mine just decided to move to a small rural city (pop. 30,000) in one of the Western states.  Farming community, not a retirement area. He checked in at the only private club in town to inquire about joining. Sorry, we have a long waiting list but you can join as a social member while you wait 4 or 5 years. The private club model is thriving in that micro world.


I think discussions on the future of the private golf clubs need to occur along separate lines.  You should probably take a discreet look at:


-private golf clubs married to real estate developments
-private destination golf clubs
-traditional private country clubs


I think you would see very different current situations and future outlooks.
Title: Re: Private Clubs at a Crossroads
Post by: Wayne_Kozun on June 08, 2019, 02:07:41 PM
I think the demographic argument is overdone as births did not fall THAT much.  See the chart below - they fell below 3.5M per year for the 70s but other than that they have been between 3.5-4.3M.  And I am guessing that this is somewhat, if not completely, offset by longevity and folks being in better shape for longer thanks to medical advances like joint replacements. 





(https://2.bp.blogspot.com/-WIiWAukATG4/WVZ-zIwLjQI/AAAAAAAArkM/CX5QWxblPIQgK2BhMnh3HIQLhSyDvIV6gCLcBGAs/s1600/USBirths2016.JPG)
Title: Re: Private Clubs at a Crossroads
Post by: Steve Kline on June 08, 2019, 05:06:04 PM
I think the demographic argument is overdone as births did not fall THAT much.  See the chart below - they fell below 3.5M per year for the 70s but other than that they have been between 3.5-4.3M.  And I am guessing that this is somewhat, if not completely, offset by longevity and folks being in better shape for longer thanks to medical advances like joint replacements. 





(https://2.bp.blogspot.com/-WIiWAukATG4/WVZ-zIwLjQI/AAAAAAAArkM/CX5QWxblPIQgK2BhMnh3HIQLhSyDvIV6gCLcBGAs/s1600/USBirths2016.JPG)


Now look at the rate of change of that. Many times it is not the absolute level of something but how fast it is growing or contracting that ultimately matters. People often react to growth by over producing. Then the contraction happens and production gets shut down more than the absolute level would indicate, but is a reaction to over production from the fast growth.
Title: Re: Private Clubs at a Crossroads
Post by: Mike Sweeney on June 08, 2019, 05:11:36 PM
Very few people agree with that analysis.  I predict a lot of suburban and urban golf course will be developed into smaller, affordable housing.



I probably agree John, so let's play them before they go under!!


(https://4.bp.blogspot.com/-esEkBq70les/W00LNgUO-mI/AAAAAAAAChc/BIyw_Bj4pVkolKjUcXmAf2u8ypI4yUDDACLcBGAs/w1200-h630-p-k-no-nu/Charlie-Brown-and-Snoopy-cartoon-someday-we-die.jpg)
Title: Re: Private Clubs at a Crossroads
Post by: John Emerson on June 08, 2019, 05:26:09 PM
The game of golf, as a whole, would be much better off with several thousand crap courses closing.  I have seen so many times that one person with some scratch builds a course for a large sum.  Few years later the same course is sold for half of what it cost to build.  Few more years later it’s sold again for a third, and finally it sells again for pennies on the dollar and can finally make money. All along going from private, then to public as each consecutive buyer starts hurting for cash.  Then the course runs several others courses close by, out of business because of the ability to charge cheap rates and still make a profit.  It’s a vicious cycle.  I’ve seen this happen several times in Kentucky. 
Title: Re: Private Clubs at a Crossroads
Post by: Tommy Williamsen on June 08, 2019, 05:58:05 PM
What I cannot figure out is why some clubs struggle and others do not. I was a member at Four Streams outside of DC. Golf only and excellent golf and world class food. We had a good caddie program and it was a second club for most. At one time we were capped at 250 single members (meaning no spouses). It was over leveraged when we bought it from the developer and the initiation fee went from $60,000 to a fraction of that. We still lost members. A member bought the club but from what I understand the club is struggling again. I wonder if some of the clubs that struggle the most are second clubs. The other area country clubs to which I belonged are doing fine.
Title: Re: Private Clubs at a Crossroads
Post by: Steve_ Shaffer on June 08, 2019, 06:14:32 PM
The author of the this article " Death of the Country Club" is not a golf writer or a golf business writer as far as my research shows. He is assistant editor of City Journal. His writing has appeared in City Journal, The American Conservative, The Atlantic, National Review . He has used 3 examples of closed private clubs to generalize the subject and  written another " doom and gloom" article.  Obviously, he his unfamiliar with my posting of golf course club closings, both private and public, here.
Yes, since the "Great Recession" some clubs have closed because of declining membership or closed because their land was too valuable not to sell and were cashed in; however, those that remain should be placed in different categories. His concluding paragraph doesn't mean anything.
There will always be the " Top Tier Member Owned Clubs" in the major metro areas that will not struggle. We all know who they are without naming names. They are the home of the " One Percenters" for the most part.
The second and third tier clubs may struggle, depending on demographics and location. Some may have been saved already by the influx of capital from Concert Golf and others. Some may go semi-private or even link with Dormie  or Boxgroove or others with an influx national or traveling members. Some may close.  It's the survival of the fittest for them.
Residential private clubs range from the ultra high end to " active adult" The ones that have failed are not so numerous.  The ones that are ultra high end are usually located in highly desirable weather areas, full time or part time, and unless another " Great Recession" happens, should survive.
Private destination clubs, we know who they are,  obviously attract  the " One Percenters" and the Captains of Industry .
Will there be a " resurgence"  of private clubs? Perhaps but not death. As I said, this was just another " doom and gloom" article.
Title: Re: Private Clubs at a Crossroads
Post by: Mike_Young on June 08, 2019, 07:47:25 PM
Private clubs are at a crossroads but the big issue is going to be clubhouses more than the courses when it comes to surviving...
Title: Re: Private Clubs at a Crossroads
Post by: Steve_ Shaffer on June 08, 2019, 08:03:04 PM
Toll Bros, a NYSE company, is building a private Nicklaus Design ( not a Jack N signature design) course  in a new residential community 10 minutes from my house in the West Valley of Phoenix WITH a 40,000sf clubhouse.


https://www.tollbrothers.com/luxury-homes-for-sale/Arizona/Sterling-Grove (https://www.tollbrothers.com/luxury-homes-for-sale/Arizona/Sterling-Grove)
Title: Re: Private Clubs at a Crossroads
Post by: Tom_Doak on June 08, 2019, 09:42:43 PM
What I cannot figure out is why some clubs struggle and others do not. I was a member at Four Streams outside of DC. Golf only and excellent golf and world class food. We had a good caddie program and it was a second club for most. At one time we were capped at 250 single members (meaning no spouses). It was over leveraged when we bought it from the developer and the initiation fee went from $60,000 to a fraction of that. We still lost members. A member bought the club but from what I understand the club is struggling again. I wonder if some of the clubs that struggle the most are second clubs. The other area country clubs to which I belonged are doing fine.


Golf courses struggle because of supply and demand.


In general, most small towns do not build too many private country clubs, but in Daryl David's example of the small Western rural city, if someone did decide to build a second course there, it would probably not only fail but take the other club down with it.


In bigger cities, there are already too many private country clubs from another era, and some will inevitably close as all but the best kill each other trying to compete on price at unsustainable levels.  Most of these clubs are set up for 300 members, and have 150-200, but the truth is they ought to have 400 members to keep the dues down a bit, and they could do so easily since many of the members play less golf now than they did 15 years ago.


"Second clubs" are another problem entirely, because they are competing in the entire universe of "second clubs" in a much broader region.  A guy in San Francisco who wants to be a member of a second club could join a club anywhere from Montana to Hawaii.  Some such clubs will have a very hard time competing against others in that universe because their situations are so different - yet they are still competing for the same people.
Title: Re: Private Clubs at a Crossroads
Post by: Dave Doxey on June 08, 2019, 10:15:36 PM
  Add in real estate development courses, which are built by developers to anchor a new development and sell house lots at a premium.  Most of these courses have cost structures that are unsustainable as an ongoing business and are either given to an HOA or sold at a large discount, once the lots are sold and the developer moves on.  These courses either become a burden to the HOA or go through a series of bankruptcies and often end up as struggling daily fee courses. 
Frequently they are zoned to be open land by the developer to meet housing density rules and thus are not able to be developed.  Costs for maintenance of the course and upkeep of overly large clubhouses make existence as a private club impossible.  A development course near me is closed and owned by the HOA.  Reportedly cost $20+M to build, yet the HOA has not been able to find a firm willing to operate the course on a lease at $1 per year. Zoned for golf or open space. Now a cost homeowners. Not to mention previous members, who lost $50K initiations.
Title: Re: Private Clubs at a Crossroads
Post by: Bernie Bell on June 09, 2019, 11:21:40 PM
Four Streams, of which I was also a member, is a one-off and a poor case study for any macro trends, in my view.  Supply and demand was not the issue.  The current demand for golf in Montgomery County MD is strong at every level -- county-run courses, private daily fee courses, and private clubs at every price point and level of exclusivity.  As in any business, some golf courses will struggle simply because they're poorly directed. 
Title: Re: Private Clubs at a Crossroads
Post by: Ryan Farrow on June 10, 2019, 01:12:49 AM
Is the end of new Country Club construction upon us or has it just been replaced by high end, destination resort golf? I see a large # of private club logos at Bandon, Sand Valley, Streamsong etc... Are these places nothing more than 2nd club replacements? It does seem to be a younger crowd which is a bit of a departure from the standard CC demographic.


What I am saying is that I have no idea what is going on right now and it's not just related to the the golf world.
Title: Re: Private Clubs at a Crossroads
Post by: Jeff Schley on June 10, 2019, 09:06:31 AM
There are so many factors at play with this situation, it is a complex problem. Some obvious facts are golf numbers in terms or participation are going down in the US (not sure about other countries). Time to play golf is prohibitive for many millennials. To make a CC a family destination you need much more capital for the pools, clubhouses, pickle ball, dinning rooms, etc., which only adds to the dues and operations.  All three of those things seem to me to be facts which work against the viability for CC's sustainability. I would think more closures/consolidations are imminent this coming decade.
Title: Re: Private Clubs at a Crossroads
Post by: Jeff Schley on June 10, 2019, 09:27:51 AM
Also keep in mind the tax code presently allows for these private clubs to not pay income taxes as they are non-profits, in addition to minimal property taxes.  Should the government eliminate these provisions (which I doubt they will) the private clubs would be in jeopardy big time.

At one point in time one could also write off their dues as a business expense, now only guest fees.
Title: Re: Private Clubs at a Crossroads
Post by: John Foley on June 10, 2019, 10:03:07 AM
Will consolidation help? I know it is not the fix for the overall industries ailment but it can help where two courses merge and you get two clubs? I know it all depends upon the debt service, membership numbers and maintenance budgets but I would think it a potential help. I know Sand Ridge & Mayfield in Cleveland combined but are there other examples where this that proven helpful?
Title: Re: Private Clubs at a Crossroads
Post by: Bernie Bell on June 10, 2019, 10:39:57 AM
Property taxes are the biggest threat to private clubs in my neck of the woods.  Local politicians have introduced legislation in each of the last 2 years that would immediately jeopardize many of the lower tier clubs.  The bills have been narrowly defeated twice, but it's a good bet the sponsors will keep trying every year.  The politicians are also trying to use taxes to effectively prohibit maintenance practices of which they disapprove.  I've no idea if this is just a deep blue state issue or not.
Title: Re: Private Clubs at a Crossroads
Post by: Carl Nichols on June 10, 2019, 11:29:16 AM
What I cannot figure out is why some clubs struggle and others do not. I was a member at Four Streams outside of DC. Golf only and excellent golf and world class food. We had a good caddie program and it was a second club for most. At one time we were capped at 250 single members (meaning no spouses). It was over leveraged when we bought it from the developer and the initiation fee went from $60,000 to a fraction of that. We still lost members. A member bought the club but from what I understand the club is struggling again. I wonder if some of the clubs that struggle the most are second clubs. The other area country clubs to which I belonged are doing fine.


Golf courses struggle because of supply and demand.



Indeed. 


As Tommy knows, I am a big fan of Four Streams.  But from a demand perspective, there are at least two big things working against it:  (1) it's 20 miles farther outside the beltway than many of the "down-county" clubs in Montgomery County; and (2) it's not a country club, so for many people with families, it can't be their only club. 
Title: Re: Private Clubs at a Crossroads
Post by: Lou_Duran on June 10, 2019, 12:00:43 PM
As in any business, some golf courses will struggle simply because they're poorly directed.


Very true.  In some areas like D/FW, even these are able to stay afloat during good times.  Economic cycles are biblical, and like the first day of pheasant season, all the young/dumb ones get thinned out.


Sadly, though things are rocking presently, there are courses still deferring necessary maintenance.  And there are some which are incurring debt to complete major renovations which may only make marginal improvements to their product.


I admire Ryan's newly found humility.  Perhaps we are sailing in unchartered waters.
Title: Re: Private Clubs at a Crossroads
Post by: Ian Mackenzie on June 10, 2019, 12:38:51 PM
Chicago has a huge concentration of golf courses - both private and public.


Most private courses are nervous, but also in denial. Clubs that had 300 full members in 2005 now have 250.
They hire "consultants" who all deliver pages out of the same playbook to desperate committees seeking the "silver bullet" to pitch to their memberships.


"Spend, spend, spend" is the matra. Add a gym, a daycare, a candy store, "grab n go" food", new dress codes, casual this, relaxed that...


Most clubs have boards of "big company guys" who love hiring consultants to solve their problems. When, in reality, most clubs are like $5-7M small businesses that should be nimble and flexible.


Not once do these clubs look at demographic trends and discuss reducing overhead to adjust to the changing landscape and the new realities.


What they usually miss:


1. Clubs with the best golf courses do not have membership issues.
2. Clubs that invest silly sums of money in their clubhouses to chase the new "millennial member" are setting themselves up for disappointment. "Build it and they will come" never works. "Hope is not a strategy."


3. Why would the "new Millennial" pay a huge country club downstroke and monthly dues just to eat dinner and splash in a pool? Plus, there are clubs that do that already. In Chicago, the Saddle and Cycle Club kicks ass at just that, for half the price of "country club dues".


The bifurcation will continue and the list of casualties and "body bags" is sure to grow.
The US created a monster and now has to pay for it.


"There will be blood."
Title: Re: Private Clubs at a Crossroads
Post by: Lou_Duran on June 10, 2019, 01:23:27 PM
Ian,


Do you see any of this tied to the political philosophy and control of an urban area?  Do clubs in blue cities face a different environment those in red to purplish areas?


My theory has been that disposable income and affordability in the populations that play golf are keys.  The intersection of economics and politics (as the art against the art of economics) might be worth exploring. 
Title: Re: Private Clubs at a Crossroads
Post by: Phil McDade on June 10, 2019, 06:25:56 PM
Here in Wisconsin, it's unclear how the private country clubs are doing. But Mike Keiser is about to kill off municipal golf in the state's second-largest city:


https://madison.com/ct/news/local/govt-and-politics/record-loss-for-madison-golf-courses-prompts-mayor-satya-rhodes/article_fa3adfbf-e5d5-53ad-9a06-13bf2be67c70.html (https://madison.com/ct/news/local/govt-and-politics/record-loss-for-madison-golf-courses-prompts-mayor-satya-rhodes/article_fa3adfbf-e5d5-53ad-9a06-13bf2be67c70.html)


Maybe that's too much of a reach. But this is more than a-butterfly-flapping-its-wings territory.


I moved to Wisconsin 30 years ago, just when my interest in golf was taking off. Lucky me. In that time, just in my home county alone, I've seen six public courses built, all of decent quality. Heck, when I arrived, Madison muni Odana Hills (Slow-dana Hills back in the day, when its tee sheet seemed jam-packed seven days a week) was the second-best public option in the entire county. A private country club was built in the suburbs, joining the four private clubs already well-established in the Madison area.


Add on to that: four Kohler courses, including Blackwolf Run and Whistling Straits; Erin Hills; a half-dozen public designer courses with names like Nicklaus, Palmer, Trevino, Player and Andy North (big name in these parts!) attached -- all within a half-day's drive for much of the state. Oh, and Sentry World and Lawsonia have upped their games with notable renovations/maintenance enhancements. (I can leave my front door and tee off on the first hole at Lawsonia in 90 minutes, so I know how this sounds; I get it. Still....) And now Keiser's sandbox Sand Valley.


Are the golf options better than when I arrived three decades ago? Unquestionably so. Wisconsin punches well above its weight when it comes to publicly accessible courses of merit.

But too much? I've long thought so. And I've long thought the courses that would get hit the hardest are the muni's and mom-and-pop small courses that dot the landscape of rural Wisconsin. Do they offer much architecturally? Maybe not, but the game losing something when those courses disappear.














Title: Re: Private Clubs at a Crossroads
Post by: Ben Sims on June 10, 2019, 09:45:50 PM
Millennial here. I think pure economics misses the boat. Though I agree with many posts here, I feel as if the idea behind why me and my peers—that can afford to—don’t flock to clubs is time related. There’s a time value to what young families spend their time on. My generation takes their kids to the brewery on weeknights. We go to restaurants. We travel a lot. And we have more than one hobby. A line item that eats up a considerable amount of time for other things is hard to justify. 


The other issue is cost. Ian touches on it above. It’s hard to justify paying for all that crap that we never use. Invariably, the gym, food, daycare, and pool is better almost anywhere else than at the club. The only draw for many my age is the golf. If I could uproot Palmetto GC and put a place just like it near me, that’s a slam dunk. But that club model is increasingly rare.
Title: Re: Private Clubs at a Crossroads
Post by: John Kirk on June 10, 2019, 10:49:31 PM
I'm pretty sure that housing, education, health care and healthy food are more expensive than they used to be.  All four.    These are essential products and services; therefore, even though the millenial professional has a comparable salary to Americans of 30-40-50 years ago, he has less disposable income.  When I was 33-34 years old, I didn't know anybody my age who belonged to a private club.

Tom D. says:
"Golf courses struggle because of supply and demand."
I'd say yes, that may be the primary factor, but the cost of maintaining and managing a golf course demands a minimum investment.
Title: Re: Private Clubs at a Crossroads
Post by: Mike_Young on June 10, 2019, 11:31:52 PM
I'd say yes, that may be the primary factor, but the cost of maintaining and managing a golf course demands a minimum investment.
Imagine if we all decided to put slate roofs on our homes.  The average American home cost would probably increase by at least 50%. Great roof but it would not be affordable and the weight of the roof would require substantial structural change to our homes. e couldn't afford the home and yet we did this to our golf courses while the industry profited from it...oh well...
Title: Re: Private Clubs at a Crossroads
Post by: John Kirk on June 11, 2019, 12:35:50 AM
Hi Mike,

I think we're on the same page.  I'm not saying that golf course operators need to make additional investments in their courses.  I'm saying golf courses require a minimum revenue from their clientele in order to stay solvent.  And it doesn't matter how many golfers there are if they can't afford that amount that keeps the course solvent.
Title: Re: Private Clubs at a Crossroads
Post by: David Restrepo on June 11, 2019, 01:17:53 AM
Millennial here too. Could American CCs take a page from Australia's book? I like to think of the latter as a no frills, "a la carte" golf. Initiation fees and annual dues are significantly lower - though generally there are more members.


For many Aussie private courses - you show up and put your clubs on the pull cart (rather than the ~5 helpers waiting at top American CCs). Pay a few bucks for range balls/tees. Play golf. Finish. Clean your own clubs/shoes and put them back in your trunk.


Maybe this has to do with hiring staff that could be considered as non-essential? I would rather pay less and pay as needed rather than seeing my pyramid of range balls magically replenished when I look away.


Also want to acknowledge that there has been consolidation in the Aussie market and quite a few clubs are struggling financially - I think this might be attributed to less playing and proximity from the CBD.   
Title: Re: Private Clubs at a Crossroads
Post by: Bernie Bell on June 11, 2019, 08:37:21 AM
In the Four Streams market, supply (number of golf courses) has been constant since the early shakeout from the recession.  I see no evidence that demand (number of golfers) has fallen.  If we're talking about demand for second memberships, that's a different story.  But if anything, simple demand for golf seems to have increased, as initiations at the lower end of private market are slowly creeping back up.  Public golf is a substitute for private golf.  So price matters.  Four Streams was in a position to compete for the golfer, millennial or otherwise, who wants amazing golf and nothing else.  Neighborhood pool/tennis clubs and gyms in the market are available to many/most at a fraction of country club costs.  But a private club has to want to compete.  Among other things, you can't make business decisions around your kitchen and have non-competitive dues to subsidize your F&B.  Your target market are golfers willing to drive 45 minutes from down county or NW DC to play golf; they MAY pay a premium for purely private golf but will not for the soup.  I think there were ways in which a more remote golf-only club with that caliber course would have been able to do well in the market, either in combination with a downcountry CC or stand-alone as a tightly directed pure golf club.
Title: Re: Private Clubs at a Crossroads
Post by: John Kavanaugh on June 11, 2019, 08:51:40 AM
This is the problem when you play for fun. You can have fun doing just about anything. Oh, and who really needs their precious ego stroked by belonging to a fancy club. The world has changed, the snobs are outside the gates looking in.
Title: Re: Private Clubs at a Crossroads
Post by: Mike_Young on June 11, 2019, 09:21:44 AM
Hi Mike,

I think we're on the same page.  I'm not saying that golf course operators need to make additional investments in their courses.  I'm saying golf courses require a minimum revenue from their clientele in order to stay solvent.  And it doesn't matter how many golfers there are if they can't afford that amount that keeps the course solvent.
AGREE....in many private clubs the member has no idea how much he is paying to play...until it hits him upside the head...
Title: Re: Private Clubs at a Crossroads
Post by: Jeff Schley on June 11, 2019, 09:22:51 AM
Hi Mike,

I think we're on the same page.  I'm not saying that golf course operators need to make additional investments in their courses.  I'm saying golf courses require a minimum revenue from their clientele in order to stay solvent.  And it doesn't matter how many golfers there are if they can't afford that amount that keeps the course solvent.
AGREE....in many private clubs the member has no idea how much he is paying to play...until it hits him upside the head...
Yep a.k.a fixed costs.
Title: Re: Private Clubs at a Crossroads
Post by: corey miller on June 11, 2019, 09:28:59 AM





And how does a mandatory caddie rule change the value proposition? 


A few of the financially strained clubs (by virtue of advertisements and membership drives) in the NYC metro area have not only dropped initiation fees but have loosened or eliminated the caddie requirement. 
Title: Re: Private Clubs at a Crossroads
Post by: Steve_ Shaffer on June 11, 2019, 09:41:09 AM
Corey,


Those "financially strained clubs (by virtue of advertisements and membership drives) in the NYC metroarea"
are not the "Top Tier" clubs. As I said above, those second and third tier clubs will struggle. It will be the survival of the fittest. Some will go semi-private. Some may get an influx of capital by selling to Concert or others. Some may close and sell for development.
Title: Re: Private Clubs at a Crossroads
Post by: Mike_Young on June 11, 2019, 09:46:06 AM
Corey,


Those "financially strained clubs (by virtue of advertisements and membership drives) in the NYC metro area"
are not the "Top Tier" clubs. As I said above, those second and third tier clubs will struggle. It will be the survival of the fittest.
Agree.  BUT "top tier" is a very small number of the total golf market...as JK say in an earlier post the "snobs" are now on the outside looking in and have made it uncool to belong...model is changing...
Title: Re: Private Clubs at a Crossroads
Post by: corey miller on June 11, 2019, 10:16:15 AM



Regardless of what tier the struggling clubs are in, and regardless of how the club properties are zoned, in many regions is is virtually impossible to sell to a developer.  It is not an option or it would have been done already. 
Title: Re: Private Clubs at a Crossroads
Post by: Steve_ Shaffer on June 11, 2019, 10:49:36 AM
In the Eastern Montgomery County area of the Philly 'burbs, within 30 minutes of my former residence , there are the following Private Clubs: Commonwealth. corporate owned and Squires, golf only clubs and the following traditional country member owned clubs- Old York Road, Cedarbrook, Cricket, Manufacturers, Huntingdon Valley,Sunnybrook,  Sandy Run. Doylestown, Lookaway, Green Valley plus Corporate owned clubs- Philmont, Meadowlands, Ace , Spring Mill, North Hills,Melrose,  LuLu also residential clubs- Talamore, Blue Bell.  The only private member owned clubs to close have been Ashbourne and Rydal.  Some publics have closed or will close shortly.


It's a very competitive market and rezoning is difficult but not impossible. Philmont, Meadowlands, North Hills, Melrose and LuLu were formerly member owned.
Title: Re: Private Clubs at a Crossroads
Post by: George Smiltins on June 11, 2019, 10:54:09 AM
It's all quite depressing. There are ways to make all of this work. Great ideas by everyone here, but sadly I don't think the decision makers at any club spend much time on golf club atlas. Older gents who long for a return to the "glory" days.


Decisions are made with the millennial golfer in mind, but I don't remember anyone ever reaching out asking for our opinions. I have no interest in mandatory caddies before 4pm, firepits, comfort stations, full lunch service at 11 am on a Tuesday. But that is all that is included on assessment surveys. "Here is a list of 50 improvements, pick which 10 you approve of" "error...you only picked 9...please make another selection." 10 new under 40's every year. 11 leave every year. bump dues up another 75 per month.


How about bulldoze the clubhouse and drop everyone's dues by $200. Has any club ever done that? Does it work?
Title: Re: Private Clubs at a Crossroads
Post by: B.Ross on June 11, 2019, 11:08:40 AM
another millennial here. i couldnt' agree more w/ the 3 that posted in last 24 hours (smiltins, restrepo, sims), but it was smiltins post that resonated the most. you're so right in that clubs in all tiers don't ask for the opinions of their youngest and most economically restrained members given that the boards are composed of boomers and maybe some gen x'ers.


i touched on this a bit on the thread about "the flag network", but given the millenial attitude, i think the way to make the club more valuable is to get your club locked into some type of reciprocal network where you get discounted access at other private clubs nationwide for when you travel but they rate limited. mini versions of club-corp travel so to speak. or if variety matters to you locally, more things like this ([size=78%]https://www.sandiegocountryclub.org/Files/Library/CHAMPIONSHIPCOLLECTION2018.PDF (https://www.sandiegocountryclub.org/Files/Library/CHAMPIONSHIPCOLLECTION2018.PDF)[/size])



Title: Re: Private Clubs at a Crossroads
Post by: John Kirk on June 11, 2019, 11:14:44 AM

Agree.  BUT "top tier" is a very small number of the total golf market...as JK say in an earlier post the "snobs" are now on the outside looking in and have made it uncool to belong...model is changing...

I think it's the other way around.  The snobs are on the inside looking out, and nobody wants to come in.  What you perceive as a snob may differ, but here's a good definition:

"A person with an exaggerated respect for high social position or wealth who seeks to associate with social superiors and dislikes people or activities regarded as lower-class."


And that is approximately why I've (at least) temporarily moved on.
 


Title: Re: Private Clubs at a Crossroads
Post by: John Kavanaugh on June 11, 2019, 11:39:09 AM
John,


Were you ever bullied as a child for having nice things?
Title: Re: Private Clubs at a Crossroads
Post by: Bernie Bell on June 11, 2019, 11:54:22 AM
So what is the millennial looking for in a private club?  One of you holds out Palmetto as a model, another reciprocal networks, and a third the "Australian model."  Each very different.  Two millennials on the board at my club, for what it's worth.  Perhaps we're an outlier in that regard. 
Title: Re: Private Clubs at a Crossroads
Post by: B.Ross on June 11, 2019, 12:08:33 PM
bernie i think the 1 thing that ties all 3 of those things together is value or efficiency. to not pay for things that aren't utilized.
Title: Re: Private Clubs at a Crossroads
Post by: John Kirk on June 11, 2019, 12:42:40 PM
John,


Were you ever bullied as a child for having nice things?

That's a weird question.  But I'll assume it's a serious one.  Not that I remember, John.  My "things" weren't any nicer than anybody else in my neighborhood or home town.  We didn't live in the nice part of town, especially after my parents divorced.

I have vague recollections of being assaulted as a very young kid at a park I didn't belong at, and riding home upset and scared.  Similarly, my friend was once hit by a bottle on our way back from the local grocery store when we were 8 or 9.  Maybe those were instances of bullying (or assault) for having nice things, if nice things means bicycles.  Probably just for being blue eyed and blonde haired, and looking like we didn't belong in that neighborhood.


The primary bullying or gamesmanship I remember is from basketball players trying to throw you off your game.

I'd ask why you would ask such a personal thing, but my experience tells me you have no intention of explaining yourself.  Perhaps it's a roundabout way of bullying by letting me humiliate myself.
Title: Re: Private Clubs at a Crossroads
Post by: John Kavanaugh on June 11, 2019, 12:59:24 PM
John,


I ask because when we first met you were a member of a collection of national clubs that would even make me envious. If I read you correctly you are no longer a member of those clubs. It seems like our lives have mirrored each others in many ways and I thought maybe like me, you always felt a tinge of shame for having nice things but overcame it by collecting even more nice things. It's a tough life if you can get it.


Even today I do not wear golf shorts outside the gates of where I play. I find it humiliating to fly the private club flag in modern society. Better for private club golfers to keep their head down so to speak.
Title: Re: Private Clubs at a Crossroads
Post by: Kalen Braley on June 11, 2019, 01:23:41 PM
Kavanaugh,

Interesting question on Snobbery.  While I can't comment on the Private Club side of things, as I've never belonged to one....I would agree with Kirk in that all the snobs I've known had money, not visa versa.

But perhaps its the tweeners, neither rich nor poor looking longingly thru the gates, or even the poor thinking something along the lines of "what a waste of resources" albeit in a different vernacular..
Title: Re: Private Clubs at a Crossroads
Post by: John Kavanaugh on June 11, 2019, 01:27:48 PM
Imperial hat wearing beer snobs with loose fitting custom headcovers on top of Mackenzie walkers may have money but it ain't a requirement.
Title: Re: Private Clubs at a Crossroads
Post by: Mike Sweeney on June 11, 2019, 02:02:04 PM
While I can't comment on the Private Club side of things, as I've never belonged to one....



Kalen,



Team Ran runs Golf Club Atlas like a private club, in my opinion. Thus, you belong to a Private Club as defined by the ADA:
[size=78%]https://adata.org/factsheet/private-clubs-under-americans-disabilities-act[/size]
[/size]
[/size]A General Definition of Private Clubs
[/size]Private membership clubs are organizations that generally have some meaningful conditions for membership, with operations often controlled by the membership, and whose facilities and activities are only open to members and their guests. Private clubs are often formed for social or recreational purposes, to promote common causes, or to associate with others who share similar viewpoints or values.A private club has the right of “expressive association,” protected under the First Amendment to the Constitution, which means the club is allowed to exclude individuals who do not represent its expressed viewpoints or principles. This enables a private club to maintain a cohesive and consistent message to both its members and the public.
Title: Re: Private Clubs at a Crossroads
Post by: Kalen Braley on June 11, 2019, 02:08:52 PM
Mike,


I meant that to mean a Private Golf clubs.  I've certainly been in "private clubs" before...
Title: Re: Private Clubs at a Crossroads
Post by: Mike_Young on June 11, 2019, 02:15:16 PM
We can talk about snobbery, craft beers, leather bags, casual dining but in the free enterprise system eventually a business has to make a profit or at least break even to continue.  If it can't it goes away and it happens to be someone's sandbox they will eventually tire of it if it cost them.  Most of golf right no doesn't work and much of that getting all of the praise is loosing it's butt. 
Title: Re: Private Clubs at a Crossroads
Post by: John Kavanaugh on June 11, 2019, 02:21:10 PM
We can talk about snobbery, craft beers, leather bags, casual dining but in the free enterprise system eventually a business has to make a profit or at least break even to continue.  If it can't it goes away and it happens to be someone's sandbox they will eventually tire of it if it cost them.  Most of golf right no doesn't work and much of that getting all of the praise is loosing it's butt.


Mike,


Do you have a problem with people who can't afford to pay what it costs to sustain a club being forced out of the game?
Title: Re: Private Clubs at a Crossroads
Post by: Craig Moore on June 11, 2019, 02:22:59 PM
Private clubs are at a crossroads but the big issue is going to be clubhouses more than the courses when it comes to surviving...


Best post of the thread.  There is an entity in SW MI that owns around 4 courses, 3 of which the courses are private but the clubhouses are open to the public. This is something that could help save some 2nd and 3rd tier clubs, but change is too slow for many clubs which = NLE
Title: Re: Private Clubs at a Crossroads
Post by: Kalen Braley on June 11, 2019, 02:33:14 PM
I had assumed, but perhaps it is faulty that the vast majority of top tier clubs are older and aren't carrying any land acquisition or design/build costs, just ongoing maintenance and minor improvements.

Even at the 2nd/3rd tier level, aren't there a good number that own thier property outright?
Title: Re: Private Clubs at a Crossroads
Post by: Mike_Young on June 11, 2019, 02:37:11 PM
We can talk about snobbery, craft beers, leather bags, casual dining but in the free enterprise system eventually a business has to make a profit or at least break even to continue.  If it can't it goes away and it happens to be someone's sandbox they will eventually tire of it if it cost them.  Most of golf right no doesn't work and much of that getting all of the praise is loosing it's butt.


Mike,


Do you have a problem with people who can't afford to pay what it costs to sustain a club being forced out of the game?


ZERO PROBLEM WITH THAT...  however, they can still be in the game if they choose...it's like the guy that has to quit driving the 750 BMW and go to the Camry...the problem arises when the company building the Camry can't afford to build the car. 
Title: Re: Private Clubs at a Crossroads
Post by: John Kavanaugh on June 11, 2019, 02:59:55 PM
My issue is that if one golfer can only afford a Camry we will all be forced to drive a Camry. I'm already seeing it from the untucked shirts to the slow greens. Every new rule introduced this year is an attempt to lower the bar of entry into the game.
Title: Re: Private Clubs at a Crossroads
Post by: Michael Dugger on June 11, 2019, 03:18:19 PM
I just can't really get into this thread.  In my mind things are pretty much the same as they always are.


As the economy expands and contracts, so will country club memberships.  The uber rich aren't affected by the forces that impact the other 99% of us.


I think inflation growing disproportionately respective to wages is going to keep the fringes away from membership, and perhaps this is really the point.


There will always be a place for the John Kavanaugh's of the world to call home, I'm certainly not worried about that.   
Title: Re: Private Clubs at a Crossroads
Post by: John Kavanaugh on June 11, 2019, 03:27:16 PM
Michael,


There will not always be a place for people like me who can only afford to play where there are many, many more members. We just lost another bowling alley and no longer have one within an hours drive from where I sit. I can't really come up with any reasons why golf should survive while bowling can not. Oh maybe one, the private club thing.
Title: Re: Private Clubs at a Crossroads
Post by: John Kavanaugh on June 11, 2019, 03:29:25 PM
Is there really any doubt that if the market gets to decide private golf will outlive public golf. Once you open the doors more people will leave than come in.
Title: Re: Private Clubs at a Crossroads
Post by: Michael Dugger on June 11, 2019, 03:40:28 PM
Michael,


There will not always be a place for people like me who can only afford to play where there are many, many more members. We just lost another bowling alley and no longer have one within an hours drive from where I sit. I can't really come up with any reasons why golf should survive while bowling can not. Oh maybe one, the private club thing.


Well, when golf becomes the number one priority in your life, move where you can join a club in a big enough region to support a private club.


I don't ever recall a day where every single community can float it.



Title: Re: Private Clubs at a Crossroads
Post by: John Kavanaugh on June 11, 2019, 03:42:46 PM
Big Papi thought he could go out amongst the people and have a nice night out. I simply just want to feel safe while I enjoy a day outside with my buds. There are very few public spaces where that is currently possible.
Title: Re: Private Clubs at a Crossroads
Post by: Michael Dugger on June 11, 2019, 03:50:50 PM
Big Papi thought he could go out amongst the people and have a nice night out. I simply just want to feel safe while I enjoy a day outside with my buds. There are very few public spaces where that is currently possible.


oh puh leez, that's low hanging fruit there, my friend.


Big Papi was stupid to think he could bang the local drug kingpin's wife and then go out in public without repercussions.


That's IF you believe the story.


Dom Repub. is just dangerous, period.


Stop contributing to policy that makes the middle class homeless if you don't like feeling unsafe.  It's Darwinism.


I see like 4 other country clubs within 10-20 miles of Vict. Nat'l.  There are plenty of places for you to feel safe.
Title: Re: Private Clubs at a Crossroads
Post by: John Kavanaugh on June 11, 2019, 04:01:06 PM
I already drive 70 miles each way 5 days a week to play Victoria. The other clubs aren't worth the drive.
Title: Re: Private Clubs at a Crossroads
Post by: Michael Dugger on June 11, 2019, 04:10:19 PM
I already drive 70 miles each way 5 days a week to play Victoria. The other clubs aren't worth the drive.


I see.  So the real issue is too many people in your community have the poor taste to support a private club that isn't architecturally stimulating golfwise.


Makes sense   



Title: Re: Private Clubs at a Crossroads
Post by: John Kavanaugh on June 11, 2019, 04:35:53 PM
If this site hates on private club members how bad must it be out in the real world?
Title: Re: Private Clubs at a Crossroads
Post by: Mike Sweeney on June 11, 2019, 04:50:19 PM
If this site hates on private club members how bad must it be out in the real world?


What planet are you on? This site loves private golf clubs with real estate, private golf club members, and private golf clubs without real estate that access private golf clubs with real estate!! How much more love can you get :)
Title: Re: Private Clubs at a Crossroads
Post by: B.Ross on June 11, 2019, 04:52:34 PM
any chance we can de-hijack this thread and bring it back to its original intent instead of trolling/sarcasm?  there's a good discussion to be had.
Title: Re: Private Clubs at a Crossroads
Post by: Mike Sweeney on June 11, 2019, 05:15:47 PM
bernie i think the 1 thing that ties all 3 of those things together is value or efficiency. to not pay for things that aren't utilized.


BRoss,


I agree with this post, but real world examples are preferred if you are going to advance a discussion. I have talked about the Disney Vacation Club model in the past on this thread -


http://www.golfclubatlas.com/forum/index.php/topic,64404.msg1535176.html#msg1535176 (http://www.golfclubatlas.com/forum/index.php/topic,64404.msg1535176.html#msg1535176)


Brilliant! This is very similar to the Disney Vacation Point System that we used for 15 or so years and just sold. The key difference was - we had shared ownership of the real estate. We made money on the points when we sold, but Disney obviously made money off the fees and then our visits to the parks and restaurants but hey, we drank the juice when the kids were younger. https://disneyvacationclub.disney.go.com/points/ (https://disneyvacationclub.disney.go.com/points/)

Here is the original model from that thread - https://www.playmore.golf/find-out-more (https://www.playmore.golf/find-out-more)

Golf is painfully slow to change for a variety of reasons including the love of the game. Why change what is loved by those that spend the $$. If we lose 1500 courses in the USA, did we really lose anything? In the worst year of 2012, we lost 154 courses.
https://www.pga.com/golf-courses/golf-buzz/more-courses-will-close-open-over-next-few-years (https://www.pga.com/golf-courses/golf-buzz/more-courses-will-close-open-over-next-few-years)


Golf is a lousy investment, but that does not mean it is going away.
Title: Re: Private Clubs at a Crossroads
Post by: John Kavanaugh on June 11, 2019, 05:58:40 PM
bernie i think the 1 thing that ties all 3 of those things together is value or efficiency. to not pay for things that aren't utilized.


BRoss,


One thing you need to accept when you join a private institution is that you don't get only exactly what you want. In order to attract more members than just you other other amenities must exist. Even in that I do think that most places distinguish between family and individual memberships. I am not a member of any club that forces me to rent a locker, to take caddies or rent carts. What do you possibly want? A fee structure where you pay just for golf on the days you choose to play golf? I do believe that is available at 100% of the public fee courses across the country. Please, how can a private club serve your needs?


You want to continue the discussion. Continue it and tell us exactly what you want at what cost.
Title: Re: Private Clubs at a Crossroads
Post by: David Restrepo on June 11, 2019, 06:42:34 PM
BRoss - you spoke of reciprocity, so I wanted to add to my case for the "Australian model". Most courses in Oz, even 2nd and 3rd tier clubs, have an expansive reciprocal network across the country and in some cases, internationally (though USA is strongly lacking for even top tier courses).


Any time I travel out of Victoria, I will set up a round with one of my reciprocal clubs. Free to play and a wonderful experience.
Title: Re: Private Clubs at a Crossroads
Post by: John Kavanaugh on June 11, 2019, 06:49:47 PM
BRoss - you spoke of reciprocity, so I wanted to add to my case for the "Australian model". Most courses in Oz, even 2nd and 3rd tier clubs, have an expansive reciprocal network across the country and in some cases, internationally (though USA is strongly lacking for even top tier courses).


Any time I travel out of Victoria, I will set up a round with one of my reciprocal clubs. Free to play and a wonderful experience.


Don't you guys down under let bus loads of numb nuts play willy nilly.
Title: Re: Private Clubs at a Crossroads
Post by: David Restrepo on June 11, 2019, 07:00:20 PM
For a fee to add to the club's coffers  ;)
Title: Re: Private Clubs at a Crossroads
Post by: John Kavanaugh on June 11, 2019, 07:03:27 PM
To name a course where I am not a member. Can't you join Moraine which is a great course as a national member and have the pro get you all the reciprocity that you can eat? I just get the feeling that people aren't really serious about this subject.
Title: Re: Private Clubs at a Crossroads
Post by: David Restrepo on June 11, 2019, 07:10:31 PM
To name a course where I am not a member. Can't you join Moraine which is a great course as a national member and have the pro get you all the reciprocity that you can eat? I just get the feeling that people aren't really serious about this subject.


I assume one would pay the expensive guest fees if you use the pro? Having a more structured reciprocity is great from a logistics perspective, like ease of booking and cost.
Title: Re: Private Clubs at a Crossroads
Post by: B.Ross on June 11, 2019, 07:13:36 PM
so much this: I assume one would pay the expensive guest fees if you use the pro? Having a more structured reciprocity is great from a logistics perspective, like ease of booking and cost.
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Title: Re: Private Clubs at a Crossroads
Post by: John Kavanaugh on June 11, 2019, 07:16:04 PM
so much this: I assume one would pay the expensive guest fees if you use the pro? Having a more structured reciprocity is great from a logistics perspective, like ease of booking and cost.



Then why do you have a problem with the Dormie Network? Every course in the network is free to any member.
Title: Re: Private Clubs at a Crossroads
Post by: corey miller on June 11, 2019, 07:17:21 PM





How many non tier-one clubs should a tier-one club have a reciprocity agreement with?  Most tier-one clubs have a  well functioning admissions component intended to weed out those that are not gentlemen or gentle ladies.  Why should anyone at a tier-one club have to worry about a less vetted person showing up for a Sunday round?  Heck it appears Ran can't even vet a website for minimum standards of decorum.
Title: Re: Private Clubs at a Crossroads
Post by: Amol Yajnik on June 11, 2019, 07:51:53 PM
any chance we can de-hijack this thread and bring it back to its original intent instead of trolling/sarcasm?  there's a good discussion to be had.


That would be really nice.


FWIW, I'm 39 so technically in Gen X but close to being a "millenial" by the definitions I can find.  I live just outside of Boston, as a point of reference.  If it was just up to me in terms of what I was looking for in a club, it would be golf first and everything else a distant second.  Give me an interesting course to play that is well-maintained and I'm good, I'm not sure that I need a fancy locker room or a great restaurant at the club.  But I'm also married with a wife and one child, and what they would want to get out of a club would be much different from me.  I'd imagine that there would need to be much of the "other" stuff in there: pool, summer activities/camp for my son, and a good youth program as well.  It's just not a "me" decision to join a club, it would have to fit into how my family would use the club as well.  We've had some discussions around it, but my wife isn't interested in the dining options at a club and lots of the other activities in a club (pool/gym/etc) can be found closer and cheaper to our home.  The social contacts that can be made have an intangible value, but not enough to overcome the convenience factor of the other options at this time.


That said, the financial aspects of a private club make it difficult for me to even consider at this time.  Take the top-tier clubs out of the equation that are always going to have people that can pay the initiation fees, and there is a large group of people that are continually getting squeezed between higher housing costs (esp. in major cities), student loans, and stagnant wage growth as compared to past generations.  I realize that this type of characterization is centered around my situation and where I live, and could be very different in other areas of the country.


I don't think it will happen in this country with as much capital has already gone into clubhouses and other accouterments that are in many clubs, but I wish more courses would streamline things and just focus on the golf.  I read somewhere that the majority of restaurants at golf clubs lose money, so why have a full-service restaurant in the first place?  Maybe a club doesn't appeal to as many people by being a "golf-only" club, but if they make themselves more attractive to the core golfer, would that be a positive development in the end?
Title: Re: Private Clubs at a Crossroads
Post by: Mike_Young on June 12, 2019, 07:14:28 AM
My issue is that if one golfer can only afford a Camry we will all be forced to drive a Camry. I'm already seeing it from the untucked shirts to the slow greens. Every new rule introduced this year is an attempt to lower the bar of entry into the game.
John,The bigger issue is the guy managing and producing at the Camry plant.  If their goal is to build a Camry using BMW parts and options so that they can one day work at the BMW plant then the Camry will soon be out of reach of the buyers.  It's a flaw in the industry...
Title: Re: Private Clubs at a Crossroads
Post by: John Kavanaugh on June 12, 2019, 08:30:38 AM
My issue is that if one golfer can only afford a Camry we will all be forced to drive a Camry. I'm already seeing it from the untucked shirts to the slow greens. Every new rule introduced this year is an attempt to lower the bar of entry into the game.
John,The bigger issue is the guy managing and producing at the Camry plant.  If their goal is to build a Camry using BMW parts and options so that they can one day work at the BMW plant then the Camry will soon be out of reach of the buyers.  It's a flaw in the industry...


Sure, and how long will it be before we roll the ball out of divots or worse, just play lift clean and place. Why pay for maintenance when there is always a good lie a club length away?
Title: Re: Private Clubs at a Crossroads
Post by: Ian Mackenzie on June 12, 2019, 08:44:59 AM
Ian,


Do you see any of this tied to the political philosophy and control of an urban area?  Do clubs in blue cities face a different environment those in red to purplish areas?


My theory has been that disposable income and affordability in the populations that play golf are keys.  The intersection of economics and politics (as the art against the art of economics) might be worth exploring.


Lou -


Not sure of the correlation.
Illinois is a blue state and Chicago is a blue town.


However, the "collar counties" (as they are called) where most of the private courses are, plus northern Cook county (where Chicago is), have a VERY purple/red hue to them. I would guess that at most private clubs the membership is majority republican - mostly for two reasons: lower taxes and less regulations.


The model is broken and many clubs will "bleed out" over the next 20 years.


As I have said in another thread, you know something is wrong when a "Doak 6" private club in Chicago costs $900/mo. and a "Doak 10" in Scotland costs $700 PER YEAR!!!!


But, cost basis of the land, real estate taxes and labor costs undermine the US model right from the Excel model spread sheet idea.
Title: Re: Private Clubs at a Crossroads
Post by: Jeff Schley on June 12, 2019, 08:57:52 AM
Ian,


Do you see any of this tied to the political philosophy and control of an urban area?  Do clubs in blue cities face a different environment those in red to purplish areas?


My theory has been that disposable income and affordability in the populations that play golf are keys.  The intersection of economics and politics (as the art against the art of economics) might be worth exploring.


Lou -


Not sure of the correlation.
Illinois is a blue state and Chicago is a blue town.


However, the "collar counties" (as they are called) where most of the private courses are, plus northern Cook county (where Chicago is), have a VERY purple/red hue to them. I would guess that at most private clubs the membership is majority republican - mostly for two reasons: lower taxes and less regulations.


The model is broken and many clubs will "bleed out" over the next 20 years.


As I have said in another thread, you know something is wrong when a "Doak 6" private club in Chicago costs $900/mo. and a "Doak 10" in Scotland costs $700 PER YEAR!!!!


But, cost basis of the land, real estate taxes and labor costs undermine the US model right from the Excel model spread sheet idea.

Also those Chicago clubs aren't open year round, there are a good 3-4 months where you can't golf there in the winter, thus your effective dues are 1/3 higher.

It is the maintenance costs that I feel are so far out of line with UK clubs as I'd like to see their income statement and what their expenses are for maintenance, both in labor and materials.  Some of it is climate and what is needed in certain climates, another part is the expectation of conditioning of US courses and meeting a XYZ standard.
Title: Re: Private Clubs at a Crossroads
Post by: John Kavanaugh on June 12, 2019, 09:19:33 AM
Sometimes you just have to pay more so good people can keep their jobs.
Title: Re: Private Clubs at a Crossroads
Post by: SB on June 12, 2019, 10:08:30 AM
What I love about this site is that everyone uses one tiny experience to extrapolate to an entire industry.  Some are even using a club that has not failed as an example of why clubs are failing. 


Since my uninformed opinion is just as good as anyone's, here’s how I see it:


1.   In the 80’s and early 90’s, most clubs had a very comfortable existence.  Most clubs were full and it was basically impossible to not be successful.  Barriers to entry were high because there was basically no financing available so few new courses got built.
2.   In the late 1990's there was a golf boom.  You can call it the Tiger Boom, but it really started before that, around the time the Golf Channel launched.  Boomers hit peak earning years and wanted to golf and move to golf communities.  Lots of new golfers came in, golf was hot and growing, and for the first time developers could build golf courses and they would be worth more than they cost.  Yes, Mike Young is correct that Wall Street money drove some of this, but it was the developers who built the courses because financing was now available, golf communities were selling like crazy and because golf was profitable.  Lots of golf courses got built thinking that boom would continue.
3.   In the early ‘00’s all those new golfers started dropping out and we were left with too many courses competing for too few people.  Golf courses and clubs are now generally worth less than the cost to construct them.  That’s why few golf courses are now being built.
4.   Competition led to lower revenues for all but those at the top of the pyramid.  This accelerated rapidly in the great Recession, reducing membership levels in many cases significantly.
5.   Clubs that were not in a good financial position starting in the early ‘00s responded by either:  1) assessing members, 2) delaying capital investment, 3) cutting expenses, or 4) taking on debt.  The first two are short term fixes but long term trouble, number 3 needs to be done right, and number 4 can be fine but it needs to be the right amount and needs to be structured properly.
6.   Instead of being a very easy business, the golf business became very difficult.  The structure of being run by inexperienced volunteers who change every two years is not a good one in a difficult business.  The clubs that have been failing are those in competitive markets who did not make the correct decisions above, or perhaps there was no correct decision to be made due to location or other factors.  Most of the public courses that I look at have cut expenses too much or in the wrong place.  Most private clubs that I look at that are failing because they didn’t cut expenses enough (or in many cases, they increased expenses) or because they delayed capital improvements for WAAAY to long.  There are some clubs that have taken on too much debt, but I would say it’s the smallest group. 
7.   I disagree strongly that clubhouses are the problem.  Outside of this site, most people do not join only for the golf course.  There’s plenty of public golf for people that only want golf.  Want the British model?  It's called a public course with a membership.  People join country clubs because the wife wants tennis, the kids want the pool, and more people than you think want the dining and social aspects.  Most of all, people want something of very high quality that fits their needs.  You don’t have to listen to me, just look at what ClubCorp is doing.  They aren’t for everyone here (this is more of a Dormie crowd), but they have a lot of experience and are pretty smart dudes who have been testing out a variety of reinvestment programs at clubs across the country.  And look where they have settled on investing money – Clubhouses, fitness, pools, dining areas.  They are not blowing up courses and remodeling.  They are not idiots and they are buying up and turning around the member owned clubs that do not reinvest in those amenities that everyone here hates.
8.   Millennials are not the problem (or it’s too early to say).  The oldest are in their late 30’s, still years short of club-joining age.  I own an inexpensive public course and we are filled with millennials – on the weekends there are more millennials than boomers. 
9.   This entire conversation is a little strange, because most clubs are doing fine, or they should be.  Sure, there are exceptions and some recent failures, but generally those were the clubs that should have failed years ago and just managed to limp along to today, which is good because they probably cut a better deal than they could have 7 or 8 years ago.  Plus, there are some markets that are still horribly oversupplied.  Those markets will continue to shake out. 
Title: Re: Private Clubs at a Crossroads
Post by: JESII on June 12, 2019, 10:10:36 AM

It is the maintenance costs that I feel are so far out of line with UK clubs as I'd like to see their income statement and what their expenses are for maintenance, both in labor and materials.  Some of it is climate and what is needed in certain climates, another part is the expectation of conditioning of US courses and meeting a XYZ standard.




Jeff,


Maintenance costs aren't some of the problem...they are the vast majority of the problem in my opinion. The climate in Great Britain means grass grows slower and the nature of the turf and the architecture means the ball can sit a little closer to the ground and still meet expectations. On the largest line item for a club, to compare against another club able to do the same thing for 30% makes for a pretty tough comparison.


Add in the American notion that every "private" club should be exclusively private makes the math really tough.


Over supply at the moment.


Sounds harsh to say, but a 20% reduction in the number of courses would make the survivors a hell of a lot healthier...
Title: Re: Private Clubs at a Crossroads
Post by: Bernie Bell on June 12, 2019, 10:37:59 AM
Mr. Busch -


Want the British model?  It's called a public course with a membership.


Do you offer this at the course you own?  What has been the uptake?  How does the cost compare with the lowest cost fully private alternatives in your market? 
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Title: Re: Private Clubs at a Crossroads
Post by: B.Ross on June 12, 2019, 11:31:42 AM

@kavanaugh - [size=78%]I have 0 issue with the dormie network, i think it's great. i'm all for things like dormie and hope it grows and they get more clubs closer to major cities. personally, i think they could only grow so much before turning into a club corp. most of what i've read about club corp clubs are that it's a glorified public experience in terms of pace of play & conditioning. i know that's not the case w/ dormie and will never be the case provided their new acquisitions are like the existing network.[/size]


@coreymiller - i understand your point, and i realize it's a bit of a catch-22 b/c the majority of the members at a tier-1 club don't even think twice about a guest fee at another private club when they travel and their pro sets something up for them (or a day their local club has restrictions for some reason), yet there are members for whom the economics of these clubs are steep enough as it is and said additional expenses matter. So should club policy serve the majority or strive to help the lowest common denominator member which in turn helps everybody?


as for tiering besides the obvious clubs in the US top 100 (maybe top 200-250) lists, how does that work? i ask b/c i don't think using say the golf week modern/classic top 200 lists to say all those clubs would be tier-1 would be fair. i say this b/c there's a club on the classic list just outside my hometown that's now corporately owned, on the verge of NLE and can be accessed now not only via club corp travel & troon prive but also through other mini memberships.



Title: Re: Private Clubs at a Crossroads
Post by: Kalen Braley on June 12, 2019, 11:40:46 AM
To switch gears a bit, even if I was in position to comfortably join a club, I don't think I would. I'm not into the one golf club monogamy thing... I like variety and I like it as much as I can get it.  Sure if it was something epic like a Cypress Point or equivalent  that would be a no-brainer, but that's so far out there, its not even a pipe dream.


However, I could see joining a club in the UK where the financial part actually makes sense (rounds played vs cost) as a place to play after work and mix in some social mingling.



Title: Re: Private Clubs at a Crossroads
Post by: John Kirk on June 12, 2019, 12:07:01 PM
What I love about this site is that everyone uses one tiny experience to extrapolate to an entire industry.  Some are even using a club that has not failed as an example of why clubs are failing. 

...

9.   This entire conversation is a little strange, because most clubs are doing fine, or they should be.  Sure, there are exceptions and some recent failures, but generally those were the clubs that should have failed years ago and just managed to limp along to today, which is good because they probably cut a better deal than they could have 7 or 8 years ago.  Plus, there are some markets that are still horribly oversupplied.  Those markets will continue to shake out.

If you go back in this thread far enough, you will see some links to macroeconomic data.

Speaking anecdotally, the membership at my local private club is down substantially.  The number of rounds played has also fallen.  Initiation fees may be at a low level, but that's hearsay.

One aspect of Mike Bodo's opening post that has not been discussed is the potential impact of a recession.


"Outside of the elite and many top-tier private clubs, will there be a mass closure of private golf/country clubs when the next recession hits or will some or many be saved by becoming aligned with reciprocal club networks or going the daily fee route?" 

It's been eleven years since the last recession started, which I believe historically is a very long period of economic growth.  It's up to each person to study and make their own conclusions about the future, and what might happen to any investments made towards joining a golf club.

Title: Re: Private Clubs at a Crossroads
Post by: John Kavanaugh on June 12, 2019, 12:14:23 PM
Considering that Mike P just passed away at 70 you best be getting all you can get now. Join every damn club that will have you.
Title: Re: Private Clubs at a Crossroads
Post by: Lou_Duran on June 12, 2019, 03:20:30 PM
Those who are seriously interested in the subject matter should take heed to what SBusch writes.  The guy has been in the trenches for years; he is a pro.


Re: adopting the UK model, but for a very few places, it is impossible.  As Ian M notes, our cost structure is completely different.  And so are our expectations.  Unlike Royal County Down which hosts 15k unaccompanied visitor rounds annually, I can't see members of Pine Valley or even my modest home course tolerating even a fifth of those.  As John K has pointed out previously, we are willing and able to pay for relative exclusivity.[size=78%]  [/size]
Title: Re: Private Clubs at a Crossroads
Post by: Rick Lane on June 12, 2019, 03:42:58 PM
Tom D said it best, of course its supply and demand.   But the answer to "why" is likely different in different regions or countries?
At our US east coast club, we would like to have 320 full members and we are maybe 10% currently short of that, so for revenue we added classes......social, pool and tennis only, preview, Junior, etc.    Its a slippery slope as more bodies are around but maybe we STILL have less revenue than the optimal (read: old, baby boomer) model.
Maybe its as simple as the boomers drove the 90's (I'm a boomer who joined at age 40) and now Genx  is a smaller generation of 40 year olds, and the Millenials, a larger generation aren't quite old enough yet?    I think that's a big factor.   Another big factor is that the previous generations maybe had the type of jobs where they stayed in one place with 2-3 job changes.    I see my millennial kids not in a place where they can plunk down the initiation fee, as they have a view that they might have ten jobs in 10 different cities in their lives so no way can they even consider a club now. 
Title: Re: Private Clubs at a Crossroads
Post by: Mike_Young on June 12, 2019, 03:48:23 PM
Those who are seriously interested in the subject matter should take heed to what SBusch writes.  The guy has been in the trenches for years; he is a pro.


I agree.  SBusch is correct.  When I speak of clubhouses being the problem it is in a little different light than he is describing.  Square footage is the problem.  So many F&B operations dont use a fully allocated cost on their banquet facilities and allocate much of the overhead to dues and then it looks like it is making more money than it actually is compared to the casual grill etc.  Some of these clubhouses have become gigantic due to additions for things that could have been absorbed in the older footprint.  My bet is that in most cases if you divide food sales by square footage and allocate the cost at a sq ft basis then casual wins out every time.  Right now many are grabbing for straws with this stuff and as Steve says,,,ClubCorp focuses on the F&B..always have...gonna be interesting
Title: Re: Private Clubs at a Crossroads
Post by: Mike_Young on June 12, 2019, 03:53:19 PM
  Another big factor is that the previous generations maybe had the type of jobs where they stayed in one place with 2-3 job changes.    I see my millennial kids not in a place where they can plunk down the initiation fee, as they have a view that they might have ten jobs in 10 different cities in their lives so no way can they even consider a club now.

Thats right...the first company like Kemper, Troon to get to 1000 clubs will rule...that will allow for mobility within its membership...150-2500 clubs doesn't get it and not anyone is really past that yet...so the smart play is assemble about 10-20 courses in a small company and then sell them...it's coming...
Title: Re: Private Clubs at a Crossroads
Post by: Kalen Braley on June 12, 2019, 03:53:52 PM
I'm curious, for those who are well traveled and such, which "Private" model do you find more common world-wide?


The US model or the UK one?
Title: Re: Private Clubs at a Crossroads
Post by: Mike_Young on June 12, 2019, 03:58:59 PM
I'm curious, for those who are well traveled and such, which "Private" model do you find more common world-wide?


The US model or the UK one?
UK...the US is more about status...IMHO..the UK is more about sharing the cost of the game
Title: Re: Private Clubs at a Crossroads
Post by: Padraig Dooley on June 12, 2019, 05:22:49 PM
One of the concepts worth considering for a golf club in financial trouble could be to reduce the number of holes. 18 to 9 or even 12.
Does anyone know of a club that has done it? Would clubs even consider it? Less maintenance, less cost, less time to play, can even eliminate some of the 'poorer' holes on the course.
 
Title: Re: Private Clubs at a Crossroads
Post by: Mike_Young on June 12, 2019, 05:58:12 PM
One of the concepts worth considering for a golf club in financial trouble could be to reduce the number of holes. 18 to 9 or even 12.
Does anyone know of a club that has done it? Would clubs even consider it? Less maintenance, less cost, less time to play, can even eliminate some of the 'poorer' holes on the course.
Padraig,I'm. not real confident in those new rad concepts.  It's just a way for all the associations and consultants to charge.  I saw where one baseball field was not getting as many teams to compete and attendance was down so they removed third base...didn't work out well for them...but it did cut maintenance cost... ;D ;D    same thing goes for golf...  it all abut the edges...that's where we get in trouble around here...
Title: Re: Private Clubs at a Crossroads
Post by: Craig Moore on June 12, 2019, 06:22:33 PM
One of the concepts worth considering for a golf club in financial trouble could be to reduce the number of holes. 18 to 9 or even 12.
Does anyone know of a club that has done it? Would clubs even consider it? Less maintenance, less cost, less time to play, can even eliminate some of the 'poorer' holes on the course.
Padraig,I'm. not real confident in those new rad concepts.  It's just a way for all the associations and consultants to charge. I saw where one baseball field was not getting as many teams to compete and attendance was down so they removed third base...didn't work out well for them...but it did cut maintenance cost... ;D ;D    same thing goes for golf... it all abut the edges...that's where we get in trouble around here...


https://www.youtube.com/watch?v=99o-bp0ohBk (https://www.youtube.com/watch?v=99o-bp0ohBk)
Title: Re: Private Clubs at a Crossroads
Post by: SB on June 12, 2019, 06:54:44 PM
Mr. Busch -
Do you offer this at the course you own?  What has been the uptake?  How does the cost compare with the lowest cost fully private alternatives in your market? 



I have a par 61 course and we offer a full membership (no green fees, cart fees, and some range privileges) for $129 a month.  It's not very popular.  We also offer a discount card for a one time fee of $99 and then you get about 25% off.  It's much more popular, even though the full membership is a fantastic deal if you play much at all.  We do require a one year commitment, so I think people are hesitant to commit to the unknown, going to Rick's point.  The cheapest private club is about $500 a month (Chris Cupit would know better than I) and has about a $5K initiation fee.
Those who are seriously interested in the subject matter should take heed to what SBusch writes.  The guy has been in the trenches for years; he is a pro.


When I speak of clubhouses being the problem it is in a little different light than he is describing.  Square footage is the problem.  So many F&B operations dont use a fully allocated cost on their banquet facilities and allocate much of the overhead to dues and then it looks like it is making more money than it actually is compared to the casual grill etc.  Some of these clubhouses have become gigantic due to additions for things that could have been absorbed in the older footprint. 


Clubhouse inefficiency is a big problem.  Lots of hallways and sitting rooms, etc.  I recently looked at a club talked about here that had the following dining areas:  Formal dining room, main dining room, men's grill, women's grill, bar, another bar, casual dining area off bar #2 (this where members actually ate), patio outside bar #2, main patio dining, and pool area.  That's 8 member dining areas that have to be serviced, not including the banquet area, which actually did make money.  And one kitchen with long walks to each area.  What a disaster.  But the members loved it.  And then they wondered why they couldn't make their mortgage payment.
Tom D said it best, of course its supply and demand.   But the answer to "why" is likely different in different regions or countries?


At our US east coast club, we would like to have 320 full members and we are maybe 10% currently short of that, so for revenue we added classes......social, pool and tennis only, preview, Junior, etc.    Its a slippery slope as more bodies are around but maybe we STILL have less revenue than the optimal (read: old, baby boomer) model.
Maybe its as simple as the boomers drove the 90's (I'm a boomer who joined at age 40) and now Genx  is a smaller generation of 40 year olds, and the Millenials, a larger generation aren't quite old enough yet?    I think that's a big factor.   Another big factor is that the previous generations maybe had the type of jobs where they stayed in one place with 2-3 job changes.    I see my millennial kids not in a place where they can plunk down the initiation fee, as they have a view that they might have ten jobs in 10 different cities in their lives so no way can they even consider a club now. 
Job movement/uncertainty is a huge deal.  I think initiation fees for anything other than old line top tier clubs are permanently going to be lower.  It does encourage people to switch clubs, though.  As an operator you have to stay on your toes.


Thirtysomething's have never joined clubs in any numbers.  Income is too low and uncertain, changing jobs, moving homes, makes it tough to join a club.  Even with discounts. Once you get married, you're stressed about money until .... you're not. 
Title: Re: Private Clubs at a Crossroads
Post by: Sean_A on June 12, 2019, 08:00:19 PM
In my experience the big problem with US public courses offering a yearly ticket is that there is no club involved....its just golf.  It is easy to see why folks wouldn't find that overly attractive.  Very few comps were offered,  there was very little in the way of the tee being reserved for ticket holders, there were no throw ups or matches.  Most of the public courses in the UK offer a membership to a club with the usual club benefits, mainly ways to play golf and socialize with club members.  One of the very best ways to meet folks in clubs is to play comps.  Of course, the US isn't big on comps so the concept falls apart at the get go.


How many proper golfers are club members in the US?  Is the issue of private clubs struggling really an issue or simply a market correcting itself? 

Ciao
Title: Re: Private Clubs at a Crossroads
Post by: Jeff Schley on June 13, 2019, 12:28:58 AM
In my experience the big problem with US public courses offering a yearly ticket is that there is no club involved....its just golf.  It is easy to see why folks wouldn't find that overly attractive.  Very few comps were offered,  there was very little in the way of the tee being reserved for ticket holders, there were no throw ups or matches.  Most of the public courses in the UK offer a membership to a club with the usual club benefits, mainly ways to play golf and socialize with club members.  One of the very best ways to meet folks in clubs is to play comps.  Of course, the US isn't big on comps so the concept falls apart at the get go.


How many proper golfers are club members in the US?  Is the issue of private clubs struggling really an issue or simply a market correcting itself? 

Ciao

Sean this is somewhat correct.  The public courses that offer a season pass for golf also have a "men's club" or a "women's club" which hold weekly competition during the week usually which basically only retired people can play in.  Thus it isn't really a club, but something for people who are retired can get together and play.

I would estimate about 60% of club members are active golfers at clubs I am a member, initiation fees (nonrefundable) are a ways to lock people in but certainly are not near where they had been in pre recession. Other than the Long Island clubs and the elites in California I'd guess the initiation fees are at least in half to probably 25% of what they were at their peak. Dues however need to be paid and have increased as you would expect for inflation.
Title: Re: Private Clubs at a Crossroads
Post by: SB on June 13, 2019, 08:50:43 AM

How many proper golfers are club members in the US?  Is the issue of private clubs struggling really an issue or simply a market correcting itself? 

Ciao


I think it's the latter.  There some other issues going on such as deferred maintenance, inefficient clubhouses, poor management, stagnant incomes, etc.  But essentially some markets have too many courses.  Some places had a 30% increase in the number of courses with no increase in population.  That math doesn't work.  The problem in some places is that nobody wants their local course to close so the market hasn't been able to correct.  But it is slowly correcting.
Title: Re: Private Clubs at a Crossroads
Post by: Joe Melchiors on June 13, 2019, 09:25:22 AM


Tom D said it best, of course its supply and demand.   But the answer to "why" is likely different in different regions or countries?


At our US east coast club, we would like to have 320 full members and we are maybe 10% currently short of that, so for revenue we added classes......social, pool and tennis only, preview, Junior, etc.    Its a slippery slope as more bodies are around but maybe we STILL have less revenue than the optimal (read: old, baby boomer) model.
Maybe its as simple as the boomers drove the 90's (I'm a boomer who joined at age 40) and now Genx  is a smaller generation of 40 year olds, and the Millenials, a larger generation aren't quite old enough yet?    I think that's a big factor.   Another big factor is that the previous generations maybe had the type of jobs where they stayed in one place with 2-3 job changes.    I see my millennial kids not in a place where they can plunk down the initiation fee, as they have a view that they might have ten jobs in 10 different cities in their lives so no way can they even consider a club now. 
Job movement/uncertainty is a huge deal.  I think initiation fees for anything other than old line top tier clubs are permanently going to be lower.  It does encourage people to switch clubs, though.  As an operator you have to stay on your toes.


Thirtysomething's have never joined clubs in any numbers.  Income is too low and uncertain, changing jobs, moving homes, makes it tough to join a club.  Even with discounts. Once you get married, you're stressed about money until .... you're not.



I think the mobility thing is a big deal and the medium level initiation clubs need to figure it out.  I didn't join a club for a long time because the initiations were either non-refundable or there was a good chance I would have to wait months/years to get back most/all of a deposit if I moved.  For many of us, moving next month/year is always a possibility. 


I would not have had a problem joining if all/most clubs understood this and had an agreement that if you moved you could take the deposit with you if you joined another club.  You could keep people from jumping around by restricting it to a certain distance away...  The current model seems to unnecessarily restrict what is already a smaller than ideal number of potential members.


-Joe
Title: Re: Private Clubs at a Crossroads
Post by: Kalen Braley on June 13, 2019, 11:13:48 AM
For those who have belonged to both a UK and US model club, what would you say are the top 3 pros and cons of each and which model did you prefer?


I'm looking at this thru the lens of ongoing sustainability and it seems the UK model is far better suited for long terms survival, but that's just a guess.
Title: Re: Private Clubs at a Crossroads
Post by: SB on June 13, 2019, 04:50:53 PM
Forgot to say thanks for the compliment, Lou!  You're no slouch yourself!
Title: Re: Private Clubs at a Crossroads
Post by: David Restrepo on June 13, 2019, 07:20:35 PM
To address moving and forfeiting initiation fees.


I do not know the finer details, but the top tier clubs in Australia that have formal reciprocity allow for your membership to be transferred for x amount of years. This might be the same for mid-tier clubs as well.


Often times, people move from Melbourne to Sydney (and vice versa) and have been able to transfer their membership (RM to RS is a common one). Another example - friend was a member at Lake Karrinyup in WA. When he moved to Melbourne, he was able to get a provisional membership at Kingston Heath.
Title: Re: Private Clubs at a Crossroads
Post by: Ian Mackenzie on June 14, 2019, 08:57:14 AM
Ian,


Do you see any of this tied to the political philosophy and control of an urban area?  Do clubs in blue cities face a different environment those in red to purplish areas?


My theory has been that disposable income and affordability in the populations that play golf are keys.  The intersection of economics and politics (as the art against the art of economics) might be worth exploring.


Lou -


Not sure of the correlation.
Illinois is a blue state and Chicago is a blue town.


However, the "collar counties" (as they are called) where most of the private courses are, plus northern Cook county (where Chicago is), have a VERY purple/red hue to them. I would guess that at most private clubs the membership is majority republican - mostly for two reasons: lower taxes and less regulations.


The model is broken and many clubs will "bleed out" over the next 20 years.


As I have said in another thread, you know something is wrong when a "Doak 6" private club in Chicago costs $900/mo. and a "Doak 10" in Scotland costs $700 PER YEAR!!!!


But, cost basis of the land, real estate taxes and labor costs undermine the US model right from the Excel model spread sheet idea.

Also those Chicago clubs aren't open year round, there are a good 3-4 months where you can't golf there in the winter, thus your effective dues are 1/3 higher.

It is the maintenance costs that I feel are so far out of line with UK clubs as I'd like to see their income statement and what their expenses are for maintenance, both in labor and materials.  Some of it is climate and what is needed in certain climates, another part is the expectation of conditioning of US courses and meeting a XYZ standard.






Average maintenance budgets for top tier private clubs in chicago are between $1M and $1.6M on "annual sales" of between $5M and $7M.
Title: Re: Private Clubs at a Crossroads
Post by: Ian Mackenzie on June 14, 2019, 09:14:52 AM
Another "false positive" data point for private clubs is the "junior member" programs they have all created to establish a "more robust pipeline" into being a full member.


If you are between 25- and 35, a "Special Junior or Junior Membership" is simply a great deal.
All private clubs in Chicago have them and they have heavily recruited single and newly married millenials.


(Give me some leeway here...)


They pay maybe 5% of the normal full freight downstroke.
They pay maybe 35-40% of the regular monthly dues.
They have FULL playing and guest privileges.
They do not need to decide to "convert" to full member until they are 35 and now maybe even 40.


Their risk is minimal and their "option value" is attractive.
However, clubs will learn that the "conversion rate" to full membership is less than forecasted for all reasons cited in this thread.


It amazes me that hardly any clubs discuss being sized correctly for the existing economic realities - like a business would.
Instead, it's always about how they can grow to meet rising costs.


Costs are going up, demographics are not in-line with growth, and the game is...well, it is what it is.

Title: Re: Private Clubs at a Crossroads
Post by: John Kavanaugh on June 14, 2019, 09:25:11 AM
35 - 40 is just when travel teams kick in. Someone in your generation needs to stand up and stop the madness.
Title: Re: Private Clubs at a Crossroads
Post by: JESII on June 14, 2019, 09:50:48 AM
Travel teams kill the Country Club!


Agree 100%
Title: Re: Private Clubs at a Crossroads
Post by: Tim Gavrich on June 14, 2019, 12:11:49 PM
I think we're in the midst of a fundamental philosophical change with regard to the viability of private club membership from the perspective of the consumer.


My sense is that in the past, the adage was "If you are worrying about how much your membership costs, you can't afford it." Which  I take to mean that a club membership was a luxury and the mere possession of it carried some acceptable intangible value - social status, a built-in sense of community, etc. - on top of the tangibles, like one's enjoyment of the course and other amenities.


The tangibles are the same, but I think the current pool of potential club members assigns less value to the intangibles, meaning that it is more important that the membership make some straight-up financial sense than it used to be. The quote above no longer applies.


We may agree or disagree about the particular reasons for this, but I would look at the sense-of-community aspect as a big part of the reason why clubs are not as strong as they were. To wit:


- My generation (b. 1989, so I'm a Millennial) and the ones adjacent seem to feel more able to join a meaningful community "for free" than previous ones. I think the flow of information (social media is a huge part of this) is the main driver.


- I think younger people now have more diverse social groups than they used to, and while clubs have increasingly diverse memberships (some have come along more slowly than others), there's still an entrenched image of the club as...well, I think you can insert the adjectives here. This image has not been combated in any meaningful way in recent years. (This is a problem all across golf, by the way, and it will persist until some pretty significant changes to the main golf institutions happen, IMO.)


- No matter how welcoming a private club is to guests, I think people are more conscious/wary than ever of power dynamics in any setting. I feel an inherent discomfort when I'm hanging out in a place where I know most of the people around me are paying good money for the privilege. A contemporary group of friends would rather hang out in a setting where they all "belong" equally.


Clubs are going to have to learn quickly who they are, and devote all their energy to being their most authentic selves. It seems like Sweetens Cove, which focuses pretty much 100% on the golf course, and lets that be The Thing, is a pretty good "golf club" model going forward, even though SC specifically, because of location, is more of a destination than a club. Great course, no other frills, lowest possible cost for the best product that serves the audience efficiently.


I'm not sure what the modern "country club" needs to do/look like to be relevant and successful like it was in the heyday while somehow being significantly more affordable. There may be no going back.
Title: Re: Private Clubs at a Crossroads
Post by: Bernie Bell on June 14, 2019, 02:06:51 PM
Tim –
I think it’s more apt to say that if you’re just computing cost per round, the math is rarely going to favor the private US club.  Yes, the difference is intangible, and the intangibles vary from club to club, muckety-muck club at one end, and then all the way down.  But (most) comments on this site lean strongly to the value in camaraderie, not status or exclusion.  And the ability to walk.
I think it is a millennial misconception that you are already linked in meaningful communities for free.  A golf affinity group on social media is different from a divot-filling night, Tuesday night league or Ryder Cup style tournament at a club.  Or a pro who will drive you out to the 3d tee if you roll up solo and he knows 2 of your buds are out there.  (Or belonging to a place of worship, bowling league or Moose Lodge.)
When it comes to paying for just what you use, and “no frills,” etc., the US courses that are held out as models are usually remote and inaccessible without significant disposable income.  In most major metros, I think there are perfectly serviceable – if not “architecturally significant” – private clubs where annual dues are less than or comparable to a trip to Bandon.  Has the Instagram effect has contributed to millennial decisions to forego one for the other? 
I hear a millennial desire for “pure golf,” “no frills” and “golf as it was meant to be."  And yet the millennial influencers on golf social media are cross-marketing $250 ostrich skin yardage book covers, $1100 walking bags and $100 polos that “capture an aristocratic bohemian aesthetic with colors and fabric naturally aged by the ocean.”  Something about that seems off to me. But I'm coming up hard on 60.
Title: Re: Private Clubs at a Crossroads
Post by: Tim Gavrich on June 14, 2019, 02:42:45 PM
Tim –
I think it’s more apt to say that if you’re just computing cost per round, the math is rarely going to favor the private US club.  Yes, the difference is intangible, and the intangibles vary from club to club, muckety-muck club at one end, and then all the way down.  But (most) comments on this site lean strongly to the value in camaraderie, not status or exclusion.  And the ability to walk.
I think it is a millennial misconception that you are already linked in meaningful communities for free.  A golf affinity group on social media is different from a divot-filling night, Tuesday night league or Ryder Cup style tournament at a club.  Or a pro who will drive you out to the 3d tee if you roll up solo and he knows 2 of your buds are out there.  (Or belonging to a place of worship, bowling league or Moose Lodge.)
When it comes to paying for just what you use, and “no frills,” etc., the US courses that are held out as models are usually remote and inaccessible without significant disposable income.  In most major metros, I think there are perfectly serviceable – if not “architecturally significant” – private clubs where annual dues are less than or comparable to a trip to Bandon.  Has the Instagram effect has contributed to millennial decisions to forego one for the other? 
I hear a millennial desire for “pure golf,” “no frills” and “golf as it was meant to be."  And yet the millennial influencers on golf social media are cross-marketing $250 ostrich skin yardage book covers, $1100 walking bags and $100 polos that “capture an aristocratic bohemian aesthetic with colors and fabric naturally aged by the ocean.”  Something about that seems off to me. But I'm coming up hard on 60.
Bernie--


Your last paragraph is pure gold! Without calling out any person or entity specifically, I share your bemusement at the interesting juxtaposition of the premium leather walking golf bag and a $30-green-fee golf course. It's definitely an emerging aesthetic!


I would caution against assigning too much significance to the influencer aesthetic, because the understandable association of social media success with highfalutin lifestyles and experiences is a) more aspirational than realistic, and b) partially an act, a curated best self, and one which I believe the younger generations will get increasingly savvy at sussing out (fingers crossed). I work in golf media and so feel obligated to have a social media presence, one where I try to avoid indulging too much in this dynamic, though I think results are mixed so far. It's a tricky landscape to navigate!


Re: your "millennial misconception" line, you may well be right, but nevertheless I believe the differences in the ways younger generations communicate and relate has rendered the formality of community that private clubs offer somewhat outdated.


One problem country clubs need to solve, especially with younger generations, is to make their hangout spaces somehow preferable to individual members' own homes. My guess is that today's average 30 year old's dwelling is, on average, nicer than that of a 30 year old 30 years ago. But country clubs are lagging behind in their efforts to modernize. The casual dining/drinking spaces are a step in the right direction, but it has to be more about the people and the "vibe," which means different things to different people.


Golf and country clubs have not exactly been a bastion of creative thinking in the past. That used to be something of a feature, but now it's definitely a bug.
Title: Re: Private Clubs at a Crossroads
Post by: Bernie Bell on June 14, 2019, 03:14:03 PM
Also, 120+ posts in this thread on "private golf at a crossroads" without a mention of women golfers, millennial or otherwise.
Title: Re: Private Clubs at a Crossroads
Post by: Daryl David on June 14, 2019, 04:33:51 PM
My guess is that today's average 30 year old's dwelling is, on average, nicer than that of a 30 year old 30 years ago.


These 30 year old's parents must have some really nice basements.  ;D
Title: Re: Private Clubs at a Crossroads
Post by: Kalen Braley on June 14, 2019, 10:20:14 PM
I think Tim makes a good point.

30 years ago.  Cable was still relatively new.  No Internet and No Cell Phones for the other 99%.  PCs were still pretty rudimentary and only interesting to the geeks and kids. No gaming consoles or cell phone games. No wi-fi...

 What else was a 30 year old gonna do with his time?  Sit at home and stare at the walls and read a book or get out of the house and go do something?
Title: Re: Private Clubs at a Crossroads
Post by: Mike Sweeney on June 15, 2019, 06:37:13 AM
Also, 120+ posts in this thread on "private golf at a crossroads" without a mention of women golfers, millennial or otherwise.


My wife does Qualitative Research for BIG American brands, and it is very rare that those brands care about anything other than "Head of Household" research. That is code for women, and it is they who make the decisions. My personal view is there are:
If I ran a Country Club, I would really only care what the woman wanted...
Title: Re: Private Clubs at a Crossroads
Post by: corey miller on June 15, 2019, 08:37:05 AM



Throwing out the use of the euphemism "head of household"...I am sure the "decision maker" in the country club and golf club universe is quite different than the population at large and certainly different than that which you would use for large american brands.


Very faulty assumption in the golf world but I guess that is why the Mcmahon Group is on speed dial for a lot of clubs. 
Title: Re: Private Clubs at a Crossroads
Post by: Mike Bodo on June 15, 2019, 08:45:52 AM
Wow, I was away for business this past week and come home to see this topic has taken on a life of its own. I haven't even made it past the first page yet, but I am glad to see the discussion that's ensued. Hopefully no blood has been drawn in the process.  ;) Thanks for everyone's contributions!
Title: Re: Private Clubs at a Crossroads
Post by: SB on June 15, 2019, 10:12:11 AM



Throwing out the use of the euphemism "head of household"...I am sure the "decision maker" in the country club and golf club universe is quite different than the population at large and certainly different than that which you would use for large american brands. 

Very faulty assumption in the golf world but I guess that is why the Mcmahon Group is on speed dial for a lot of clubs.


We did a study many years ago and came up with the figure that, in 80% of the cases, the woman was the decision maker.  It was about 20 years ago so couldn't tell you what the question was, but it was clear at the time that moms were the ones pulling the trigger.  This was a survey of new members and was done at country clubs, not golf only clubs. 
Title: Re: Private Clubs at a Crossroads
Post by: Mike Bodo on June 15, 2019, 12:19:31 PM
WHEW! Finally caught up. Some excellent comments and ideas discussed throughout this thread and great hearing from our Millennial contributors. I found many the talking points raised by SBusch relatable and spot-on. To add to what's already been shared and discussed, let me offer my own personal mico-case example to add to the mix.


Up until this year, I had been a member at a private SE Michigan club the past three years. I loved and still love the course, the historic clubhouse we had, the men's locker and grill, our gorgeous dining hall, swimming pool, staff, but most of all, the membership. Having caddied at two private clubs growing up - one of which being Oakland Hills - I saw first-hand how pretentious and high-falutin much of the membership at each was. Don't get me wrong, there were plenty of humble, generous, kind, funny and respectful members at both clubs, but there were enough of the former personality types to know that if I ever attained that type of wealth I probably wouldn't mix well with that group. Fast-forward 30 years and the club I eventually joined was closer in mindset and spirit to my college fraternity than it was the stuffy, elitist clubs I worked at as a kid. I felt right at home and my family and I enjoyed our time together there.


Regrettably and tragically, our iconic clubhouse (built in 1926) caught fire and burned down last June to the shock and dismay of everyone. While virtually everything inside the building was lost, we all pulled our boot-straps up and did our best to make the best of a difficult and unpleasant situation. Sadly, when it came time to renew my membership for 2019, I had a lot of tough decisions to make. For starters, I had no choice but to become a Class A member this year, which meant an increase in monthly dues in exchange for equity, whatever that really means in today's day and time. In addition, where I was previously assessed at 50% of the assessable amount, I would now pay 100%. To offset some of some of these costs I had hoped the club would reduce our annual fees seeing that a number of amenities we were paying for, i.e. private locker, sauna/showers, men's grill, patio, etc. were lost in the fire. While the club rented temporary lockers following the fire, which they placed in a separate building unaffected by it, you couldn't keep anything in them overnight, thus it was a poor substitute to having a personal private locker. In short, the club was losing it's cost-to-value proposition, as I would now be paying much more than I previously had in return for less in the form of amenities and services.

What sealed the deal for me leaving this club was the season walking pass offered by Washtenaw Golf Club (aka Washtenaw Country Club) a once private now daily fee course which was 15 min. closer to my home and every bit as good, if not arguably a better course than my private club. For less than $2k I receive unlimited golf, unlimited use of the driving range/practice facilities and a full-size private locker - including use of the locker room facilities. Having formerly been a private club, Washtenaw had all the amenities of my private club minus the swimming pool (which they shuttered two years ago) and tennis courts, which our club allowed to fall into disrepair and become an eye-sore. Do the math, I was paying over $12k annually at a second-tier private (including food/beverage) and would now pay a fraction of that at my new club, even with food and beverage thrown in. In addition, I could carry my bag or walk with a trolley whenever I wanted, which I couldn't do at our private club until after 3 PM. It was either get charged to use a cart or caddie if you were teeing off prior to that.

Having gone the daily fee route last year boosted Washtenaw's revenues. So much so that the owner who was operating it and the Polo Fields of Ann Arbor (a private golf club), sold the latter late last summer, which should tell you something. There are a lot of Millennials I see on the course at Washtenaw - especially on the weekends. That generation is very visible and well-represented, which bodes well for the game. In fact, at 54, I feel like one of the old guys now whereas at my former private club I was the median age. The one thing I don't receive with my pass (they refer to it as a membership) is preferred tee times, which isn't that big of a deal to me. Whether the club is making money or not is another question, but given how many weddings, banquets and events it hosts throughout the week and weekends, I have to believe they're doing okay.

After Washtenaw's clubhouse burnt down in 1981, the membership at the time had to borrow money to the tune of $1,000,000.00 to finish construction of its new clubhouse. Unfortunately, they could not pay the debt note off when it came due and when the great recession hit they ended up being sold to the Polo Fields group, where they continued operating as a private club for several years prior to going the semi-private and ultimately daily fee route. That said, a lot of former members still play there and, like me, are annual season pass holders.

I've heard through the grapevine that my former private club will have to borrow money to complete construction of its new clubhouse, which they haven't even begun building. In the meantime, revenues there are decreasing mainly due to attrition in the membership ranks (social and golfing), which as a byproduct affects golfing rounds, food/beverage purchases, pro shop purchases, etc. while expenses remain high as a result of the clubs decision to erect, maintain and operate a temporary clubhouse/dining room, kitchen and bathrooms. I suspect some of you can guess how this story will end, as in many ways it mirror's Washtenaw. However, I bring this up because it is an interesting contrast and case study of two diametrically opposed business models. Without seeing financial statements from either entity it's hard to know which is working and which isn't. All I know is that as a consumer, I prefer Washtenaw's model given the attractive cost-to-value proposition. In fact, other once private and semi-private clubs in my area such as Radrick Farms (Dye) and University of Michigan (MacKenzie) have adopted this same business model and now offer season golfing passes to the public at a greatly reduced rate to what a private membership would cost.

I'd be curious to hear of other once former private clubs having gone this route and to what degrees of success or failure they are having? In many respects, the creation of the annual golf pass mirrors that adopted by the ski industry years ago. Nearly every ski resort and operator in the U.S. offers some type of discounted annual pass. You'd be hard-pressed to find one that doesn't. A lot of these operators also belong to national/international ski pass networks, such as Epic (Vail Resorts), Ikon and Mountain Collective giving access to these resorts and destinations to non-locals. Perhaps we'll see a similar multi-pronged business and marketing approach adopted by private, semi-private and daily fee golf clubs whereby consumers have access to them on a local level, in addition to regionally, nationally and internationally via a mix of membership networks and holding companies (Club Corp.)? All I know is that nothing remains static forever and I suspect we're in the early phases of a major transformation taking place in the golf industry, which hopefully brings with it more affordability, accessibility and flexibility. Only time will tell.
Title: Re: Private Clubs at a Crossroads
Post by: Mike_Young on June 15, 2019, 12:38:47 PM
Mike,Interesting take you have on Washtenaw. It's a tough deal and will be interesting to watch...
Title: Re: Private Clubs at a Crossroads
Post by: Duncan Cheslett on June 16, 2019, 02:20:54 AM
Mike,


From your story clubhouse fires don't seem to be as profitable in the US as they have been over the years for many clubs in the UK!


 ;)


Title: Re: Private Clubs at a Crossroads
Post by: Thomas Dai on June 16, 2019, 05:20:42 AM
Regrettably Clubhouses catching fire have, amongst many other unpleasant aspects, caused the loss of much golfing memorabilia and historical etc records. A great shame.
A good reason for Clubs to photograph as much of their records etc as they can which of course is a lot easier these days with digital cameras etc and storage on memory sticks and Clouds and the likes.
Atb
Title: Re: Private Clubs at a Crossroads
Post by: BCrosby on June 16, 2019, 10:17:59 AM
Great post Tim. You nailed it. My kids are your age; you capture their thinking quite well.


You are also right that there is no going back. In a couple of decades most golf clubs will be different animals or they will have ceased to exist.


Bob 
Title: Re: Private Clubs at a Crossroads
Post by: Mike_Young on June 16, 2019, 11:03:13 AM
Regrettably Clubhouses catching fire have, amongst many other unpleasant aspects, caused the loss of much golfing memorabilia and historical etc records. A great shame.
A good reason for Clubs to photograph as much of their records etc as they can which of course is a lot easier these days with digital cameras etc and storage on memory sticks and Clouds and the likes.
Atb


BUT . many clubhouse fires have saved clubs also...so don't forget that....
Title: Re: Private Clubs at a Crossroads
Post by: corey miller on June 16, 2019, 11:07:32 AM



Mike Bodo


isn't the real "tell" here what the decision making process would have been for you had your original club not had a fire?  At 55 your dues would have doubled?
Title: Re: Private Clubs at a Crossroads
Post by: Mike Bodo on June 17, 2019, 01:47:42 AM



Mike Bodo


isn't the real "tell" here what the decision making process would have been for you had your original club not had a fire?  At 55 your dues would have doubled?
I actually had every intention of re-upping and becoming a Class A member had the clubhouse not burned down, despite the 12% increase in monthly dues and having to pay 100% of any assessment amount. It was still worth it to me, as I loved the membership and all the amenities and history that came with our original clubhouse. It no longer was a good enough deal for me to remain at the club and pay more only to get less in return. It was a very difficult decision to arrive at given everything I had invested in the club financially and emotionally, but in hindsight I'm glad I made the move, as I have a great new home club and the reduced financial obligation has freed me up to play a lot more courses outside of my home club, which I am grateful for.
Title: Re: Private Clubs at a Crossroads
Post by: Jeff Schley on June 18, 2019, 10:41:17 AM



Mike Bodo


isn't the real "tell" here what the decision making process would have been for you had your original club not had a fire?  At 55 your dues would have doubled?
I actually had every intention of re-upping and becoming a Class A member had the clubhouse not burned down, despite the 12% increase in monthly dues and having to pay 100% of any assessment amount. It was still worth it to me, as I loved the membership and all the amenities and history that came with our original clubhouse. It no longer was a good enough deal for me to remain at the club and pay more only to get less in return. It was a very difficult decision to arrive at given everything I had invested in the club financially and emotionally, but in hindsight I'm glad I made the move, as I have a great new home club and the reduced financial obligation has freed me up to play a lot more courses outside of my home club, which I am grateful for.
Mike wonderful perspective on making the most of every situation, you sound like a guy who makes any club better because of your positive attitude. Happiness most of the time is a choice.
Title: Re: Private Clubs at a Crossroads
Post by: Wayne_Kozun on June 18, 2019, 01:56:43 PM
Travel teams kill the Country Club!


Agree 100%
Not so much in Canada as the travel teams are in hockey and the hockey and golf seasons don't overlap very much.
Title: Re: Private Clubs at a Crossroads
Post by: V_Halyard on June 23, 2019, 02:20:28 PM
Also, 120+ posts in this thread on "private golf at a crossroads" without a mention of women golfers, millennial or otherwise.

My wife does Qualitative Research for BIG American brands, and it is very rare that those brands care about anything other than "Head of Household" research. That is code for women, and it is they who make the decisions. My personal view is there are:
  • Country Clubs with golf
  • Private Golf Clubs
  • Every other type of golf that pulls people away from the above
If I ran a Country Club, I would really only care what the woman wanted...
Why would you care about golf's largest potential growth demographic?  ;)

Title: Re: Private Clubs at a Crossroads
Post by: V_Halyard on June 23, 2019, 03:08:54 PM
Enjoying catching up on this excellently complex private club thread. I am reminded of a (theoretical) project that chose to sell $Millions of Real estate lots, then build $Multi-Million Clubhouse, then invest in $xxx,000 in a putting area,  then as a last step, spend money on a feasibility study to understand if the existing and obviously f****d up golf course was in need of un-f****ing. I bet many here can cut and paste this scenario.

Demographics and Geography seem to play a big part in each scenario. NYC is different than Wisconsin. I especially enjoyed learning how clubhouse fires serve as restoration and membership tools.  :)
I think Mike Young delivered an MVP Line:
"Private clubs are at a crossroads but the big issue is going to be clubhouses more than the courses when it comes to surviving..."

It also seems that there are two things that can accelerate the demise of a club:
1: Asset Mismanagement
2: Cultural Mismanagement.
Title: Re: Private Clubs at a Crossroads
Post by: V_Halyard on June 23, 2019, 03:12:58 PM
WHEW! Finally caught up. Some excellent comments and ideas discussed throughout this thread and great hearing from our Millennial contributors. I found many the talking points raised by SBusch relatable and spot-on. To add to what's already been shared and discussed, let me offer my own personal mico-case example to add to the mix.


Up until this year, I had been a member at a private SE Michigan club the past three years. I loved and still love the course, the historic clubhouse we had, the men's locker and grill, our gorgeous dining hall, swimming pool, staff, but most of all, the membership. Having caddied at two private clubs growing up - one of which being Oakland Hills - I saw first-hand how pretentious and high-falutin much of the membership at each was. Don't get me wrong, there were plenty of humble, generous, kind, funny and respectful members at both clubs, but there were enough of the former personality types to know that if I ever attained that type of wealth I probably wouldn't mix well with that group. Fast-forward 30 years and the club I eventually joined was closer in mindset and spirit to my college fraternity than it was the stuffy, elitist clubs I worked at as a kid. I felt right at home and my family and I enjoyed our time together there.


Regrettably and tragically, our iconic clubhouse (built in 1926) caught fire and burned down last June to the shock and dismay of everyone. While virtually everything inside the building was lost, we all pulled our boot-straps up and did our best to make the best of a difficult and unpleasant situation. Sadly, when it came time to renew my membership for 2019, I had a lot of tough decisions to make. For starters, I had no choice but to become a Class A member this year, which meant an increase in monthly dues in exchange for equity, whatever that really means in today's day and time. In addition, where I was previously assessed at 50% of the assessable amount, I would now pay 100%. To offset some of some of these costs I had hoped the club would reduce our annual fees seeing that a number of amenities we were paying for, i.e. private locker, sauna/showers, men's grill, patio, etc. were lost in the fire. While the club rented temporary lockers following the fire, which they placed in a separate building unaffected by it, you couldn't keep anything in them overnight, thus it was a poor substitute to having a personal private locker. In short, the club was losing it's cost-to-value proposition, as I would now be paying much more than I previously had in return for less in the form of amenities and services.

What sealed the deal for me leaving this club was the season walking pass offered by Washtenaw Golf Club (aka Washtenaw Country Club) a once private now daily fee course which was 15 min. closer to my home and every bit as good, if not arguably a better course than my private club. For less than $2k I receive unlimited golf, unlimited use of the driving range/practice facilities and a full-size private locker - including use of the locker room facilities. Having formerly been a private club, Washtenaw had all the amenities of my private club minus the swimming pool (which they shuttered two years ago) and tennis courts, which our club allowed to fall into disrepair and become an eye-sore. Do the math, I was paying over $12k annually at a second-tier private (including food/beverage) and would now pay a fraction of that at my new club, even with food and beverage thrown in. In addition, I could carry my bag or walk with a trolley whenever I wanted, which I couldn't do at our private club until after 3 PM. It was either get charged to use a cart or caddie if you were teeing off prior to that.

Having gone the daily fee route last year boosted Washtenaw's revenues. So much so that the owner who was operating it and the Polo Fields of Ann Arbor (a private golf club), sold the latter late last summer, which should tell you something. There are a lot of Millennials I see on the course at Washtenaw - especially on the weekends. That generation is very visible and well-represented, which bodes well for the game. In fact, at 54, I feel like one of the old guys now whereas at my former private club I was the median age. The one thing I don't receive with my pass (they refer to it as a membership) is preferred tee times, which isn't that big of a deal to me. Whether the club is making money or not is another question, but given how many weddings, banquets and events it hosts throughout the week and weekends, I have to believe they're doing okay.

After Washtenaw's clubhouse burnt down in 1981, the membership at the time had to borrow money to the tune of $1,000,000.00 to finish construction of its new clubhouse. Unfortunately, they could not pay the debt note off when it came due and when the great recession hit they ended up being sold to the Polo Fields group, where they continued operating as a private club for several years prior to going the semi-private and ultimately daily fee route. That said, a lot of former members still play there and, like me, are annual season pass holders.

I've heard through the grapevine that my former private club will have to borrow money to complete construction of its new clubhouse, which they haven't even begun building. In the meantime, revenues there are decreasing mainly due to attrition in the membership ranks (social and golfing), which as a byproduct affects golfing rounds, food/beverage purchases, pro shop purchases, etc. while expenses remain high as a result of the clubs decision to erect, maintain and operate a temporary clubhouse/dining room, kitchen and bathrooms. I suspect some of you can guess how this story will end, as in many ways it mirror's Washtenaw. However, I bring this up because it is an interesting contrast and case study of two diametrically opposed business models. Without seeing financial statements from either entity it's hard to know which is working and which isn't. All I know is that as a consumer, I prefer Washtenaw's model given the attractive cost-to-value proposition. In fact, other once private and semi-private clubs in my area such as Radrick Farms (Dye) and University of Michigan (MacKenzie) have adopted this same business model and now offer season golfing passes to the public at a greatly reduced rate to what a private membership would cost.

I'd be curious to hear of other once former private clubs having gone this route and to what degrees of success or failure they are having? In many respects, the creation of the annual golf pass mirrors that adopted by the ski industry years ago. Nearly every ski resort and operator in the U.S. offers some type of discounted annual pass. You'd be hard-pressed to find one that doesn't. A lot of these operators also belong to national/international ski pass networks, such as Epic (Vail Resorts), Ikon and Mountain Collective giving access to these resorts and destinations to non-locals. Perhaps we'll see a similar multi-pronged business and marketing approach adopted by private, semi-private and daily fee golf clubs whereby consumers have access to them on a local level, in addition to regionally, nationally and internationally via a mix of membership networks and holding companies (Club Corp.)? All I know is that nothing remains static forever and I suspect we're in the early phases of a major transformation taking place in the golf industry, which hopefully brings with it more affordability, accessibility and flexibility. Only time will tell.
Interesting thoughts. The ski model is interesting but is driven by a consolidation of big dogs and Crown Jewels. The difference is that we would not be able to buy an EPIC pass to play unlimited rounds at Pebble, NGLA , etc but would be interesting to own a Kemper/Keiser Pass. (Remember where you saw this idea) lol
Dormie Network will be interesting to watch although the collection of courses will appeal to individual tastes.
Title: Re: Private Clubs at a Crossroads
Post by: V_Halyard on June 23, 2019, 03:37:23 PM
The article at the link below ties in nicely with the subject being discussed in a separate topic regarding golf membership networks and their potential impact on both how and where the game is played.
https://www.city-journal.org/country-clubs (https://www.city-journal.org/country-clubs)


The comment section of the actual article is insightful.
Title: Re: Private Clubs at a Crossroads
Post by: Mike Sweeney on June 23, 2019, 09:10:49 PM

The comment section of the actual article is insightful.


Just had a long car ride, so I took a look.


This makes me appreciate what Ran had created. Sure there are few rules here, but most of us post with our real names. I genuinely appreciate that.
Title: Re: Private Clubs at a Crossroads
Post by: Chris Hughes on November 02, 2023, 08:11:52 AM
Chicago has a huge concentration of golf courses - both private and public.


Most private courses are nervous, but also in denial. Clubs that had 300 full members in 2005 now have 250.
They hire "consultants" who all deliver pages out of the same playbook to desperate committees seeking the "silver bullet" to pitch to their memberships.


"Spend, spend, spend" is the matra. Add a gym, a daycare, a candy store, "grab n go" food", new dress codes, casual this, relaxed that...


Most clubs have boards of "big company guys" who love hiring consultants to solve their problems. When, in reality, most clubs are like $5-7M small businesses that should be nimble and flexible.


Not once do these clubs look at demographic trends and discuss reducing overhead to adjust to the changing landscape and the new realities.


What they usually miss:


1. Clubs with the best golf courses do not have membership issues.
2. Clubs that invest silly sums of money in their clubhouses to chase the new "millennial member" are setting themselves up for disappointment. "Build it and they will come" never works. "Hope is not a strategy."


3. Why would the "new Millennial" pay a huge country club downstroke and monthly dues just to eat dinner and splash in a pool? Plus, there are clubs that do that already. In Chicago, the Saddle and Cycle Club kicks ass at just that, for half the price of "country club dues".


The bifurcation will continue and the list of casualties and "body bags" is sure to grow.
The US created a monster and now has to pay for it.


"There will be blood."


Very astute analysis & commentary. 🫵
Title: Re: Private Clubs at a Crossroads
Post by: Kalen Braley on November 02, 2023, 11:29:37 AM
Chicago has a huge concentration of golf courses - both private and public.


Most private courses are nervous, but also in denial. Clubs that had 300 full members in 2005 now have 250.
They hire "consultants" who all deliver pages out of the same playbook to desperate committees seeking the "silver bullet" to pitch to their memberships.


"Spend, spend, spend" is the matra. Add a gym, a daycare, a candy store, "grab n go" food", new dress codes, casual this, relaxed that...


Most clubs have boards of "big company guys" who love hiring consultants to solve their problems. When, in reality, most clubs are like $5-7M small businesses that should be nimble and flexible.


Not once do these clubs look at demographic trends and discuss reducing overhead to adjust to the changing landscape and the nw realities.

What they usually miss:

1. Clubs with the best golf courses do not have membership issues.
2. Clubs that invest silly sums of money in their clubhouses to chase the new "millennial member" are setting themselves up for disappointment. "Build it and they will come" never works. "Hope is not a strategy."

3. Why would the "new Millennial" pay a huge country club downstroke and monthly dues just to eat dinner and splash in a pool? Plus, there are clubs that do that already. In Chicago, the Saddle and Cycle Club kicks ass at just that, for half the price of "country club dues".

The bifurcation will continue and the list of casualties and "body bags" is sure to grow.
The US created a monster and now has to pay for it.

"There will be blood."

Very astute analysis & commentary. 🫵


Chris,

4.5 years later and post-pandemic, I wonder if this is still true?  I'd bet most of the "struggling" clubs Ian referenced are back to full health and perhaps even have a wait list.

P.S.  Love the "There will be blood" reference, one of my all time fave movies!
Title: Re: Private Clubs at a Crossroads
Post by: Rob Marshall on November 02, 2023, 11:44:43 AM
Private clubs have never been healthier

Title: Re: Private Clubs at a Crossroads
Post by: Brian Finn on November 02, 2023, 12:20:59 PM
Private clubs have never been healthier
This seems to be almost universally true.  What do the best run clubs do (or not do) now to ensure they remain healthy for years to come? 
Title: Re: Private Clubs at a Crossroads
Post by: Tim Martin on November 02, 2023, 01:14:21 PM
Private clubs have never been healthier
This seems to be almost universally true.  What do the best run clubs do (or not do) now to ensure they remain healthy for years to come?


Effectively manage debt in a high interest rate environment.
Title: Re: Private Clubs at a Crossroads
Post by: Daryl David on November 02, 2023, 11:42:28 PM
Private clubs have never been healthier
This seems to be almost universally true.  What do the best run clubs do (or not do) now to ensure they remain healthy for years to come?


Effectively manage debt in a high interest rate environment.


Hopefully they were able to retire the debt during the recent boom years. I would be very concerned if a club I belonged to was taking on debt right now.   :(
Title: Re: Private Clubs at a Crossroads
Post by: Rob Marshall on November 03, 2023, 08:50:27 AM
Private clubs have never been healthier
This seems to be almost universally true.  What do the best run clubs do (or not do) now to ensure they remain healthy for years to come?


Effectively manage debt in a high interest rate environment.


Hopefully they were able to retire the debt during the recent boom years. I would be very concerned if a club I belonged to was taking on debt right now.   :(


Why would a club ever pay off it's debt? Current members paying off the debt for future members? Manage yes payoff no.
Title: Re: Private Clubs at a Crossroads
Post by: Tim_Weiman on November 03, 2023, 09:22:31 AM

The comment section of the actual article is insightful.


Just had a long car ride, so I took a look.


This makes me appreciate what Ran had created. Sure there are few rules here, but most of us post with our real names. I genuinely appreciate that.
Mike,


I think Ran’s decision to eliminate anonymity was good. Maybe there are other topics where protecting anonymity is a good thing, but I don’t think so in the case of golf architecture discussion.
Title: Re: Private Clubs at a Crossroads
Post by: John Kirk on November 03, 2023, 10:26:56 AM

On a cranky day in 2019, I predicted 50-75% of country clubs would fail within 25 years.  The golf business has instead thrived and grown.  25 years isn't over yet, but I appear to be on my way to making a bad prediction.  We'll see.


What happened?  I'd say the biggest factor was the coronavirus pandemic beginning in early 2020.  It was a black swan event that favored golf.  People found that playing golf was a safe outdoor form of recreation, while other forms of recreation and social activity were less desirable.  The golf business has thrived since.


I still think there are structural problems in the economy that will ultimately put pressure on the golf business.  In the meantime, let the good times roll.
Title: Re: Private Clubs at a Crossroads
Post by: John Handley on November 03, 2023, 10:34:01 AM
I disagree that it was a black swan event that people found it safer to play golf outside versus something indoors.  Maybe more of a shift of people doing what they really want to do instead of putting it off for whatever reason.  People aren't dropping $50, 100K to join a nice club because it's safe.  They do it because they really want to.  The pandemic showed us that life is short so spend your time doing what you want.  That's why many people moved out of cities and into the mountains, people joined expensive golf clubs, etc.



Title: Re: Private Clubs at a Crossroads
Post by: John Kirk on November 03, 2023, 10:55:44 AM
I disagree that it was a black swan event that people found it safer to play golf outside versus something indoors.  Maybe more of a shift of people doing what they really want to do instead of putting it off for whatever reason.  People aren't dropping $50, 100K to join a nice club because it's safe.  They do it because they really want to.  The pandemic showed us that life is short so spend your time doing what you want.  That's why many people moved out of cities and into the mountains, people joined expensive golf clubs, etc.


I'll add that many more information type workers are working from home as well.  Technological improvements are expected to accelerate change in society, but that knowledge doesn't prepare you for the speed at which things are happening these days.
Title: Re: Private Clubs at a Crossroads
Post by: Chris Hughes on November 03, 2023, 11:44:26 AM
Private clubs have never been healthier
This seems to be almost universally true.  What do the best run clubs do (or not do) now to ensure they remain healthy for years to come?

Effectively manage debt in a high interest rate environment.


Hopefully they were able to retire the debt during the recent boom years. I would be very concerned if a club I belonged to was taking on debt
 now.   :(










In the optimal capital structure of a well run "golf club" (not country club):


1.  Is there a place for "debt" that is long-term in nature?   


2.  If so, how much is too much?
Title: Re: Private Clubs at a Crossroads
Post by: Mike_Trenham on November 06, 2023, 10:00:04 AM
Private clubs have never been healthier
This seems to be almost universally true.  What do the best run clubs do (or not do) now to ensure they remain healthy for years to come?

Effectively manage debt in a high interest rate environment.


Hopefully they were able to retire the debt during the recent boom years. I would be very concerned if a club I belonged to was taking on debt
 now.   :(










In the optimal capital structure of a well run "golf club" (not country club):


1.  Is there a place for "debt" that is long-term in nature?   


2.  If so, how much is too much?


How much debt is ok - I would say about 1.5x revenue is manageable when things slow down, debt over 2.5x revenue is when things get risky and interest is too big a part of the cash put towards serving the debt each year.
Title: Re: Private Clubs at a Crossroads
Post by: SB on November 07, 2023, 08:52:40 AM
"How much debt is ok - I would say about 1.5x revenue is manageable when things slow down, debt over 2.5x revenue is when things get risky and interest is too big a part of the cash put towards serving the debt each year."



For a private club, that seems very high.  If successful clubs are worth around 2.0x revenue or so, you're looking at an LTV of 75% - over 100%.  60% LTV is about the max I would go.  For a member owned club, 1X revenue might be too much.  With interest, that would put your debt service at around 10% of revenue.  Not chump change.


And don't forget about equipment leases!  That is also debt.  Everyone always forgets about equipment leases.
Title: Re: Private Clubs at a Crossroads
Post by: Matt Schoolfield on November 07, 2023, 03:16:36 PM
How much debt is ok - I would say about 1.5x revenue is manageable when things slow down, debt over 2.5x revenue is when things get risky and interest is too big a part of the cash put towards serving the debt each year.
This is trivial information for folks in finance, but people interested in this topic should consider picking up a Texas Instruments: BA II Plus (https://education.ti.com/en/products/calculators/financial/baii-plus-professional) (or Plus Professional) calculator. Debt carry/amortization calculations are very complex, but this calculator makes them very easy to deal with. Anyone can quickly calculate the amount of debt they can carry at the repayment levels they are comfortable with. They are fun to play with and are quite useful.
Title: Re: Private Clubs at a Crossroads
Post by: Craig Sweet on November 07, 2023, 05:07:34 PM
The inequality built into our economic system is the main cause for failure of many institutions....and it will be the demise of "country clubs".   
Title: Re: Private Clubs at a Crossroads
Post by: Philip Caccamise on November 07, 2023, 06:07:57 PM
I had a long conversation with my buddy on this topic last year when we were touring England and discussing the UK model vs. the US.


Both of us are Gen X. He's mid-50's, I'm mid-40's. He has no kids, I have one. We both do pretty well career wise, are quite modest in our housing and don't expect to move soon, so can certainly afford golf as a luxury. We would be the ideal demographic for a private club.


I live in south Orange County, CA and he lives in Nashville, TN. In both locations, the high end public golf offerings surpass the private golf offerings. There is nothing architectural of note in either location, neither of us care about a pool or tennis courts or a fancy clubhouse, so why would we spend $50-100k on initiation and $10k a year of our golf budget on one decent but unremarkable golf course vs. a 'club card' at a high end public course(s)- leaving thousands a year to spend on travel for golf?


Even if could get over the initiation and was happy playing the same course twice a week every week, 100 times in a year, the value proposition still falls short. The golf courses are simply not good enough to justify the expense. Unless there's a price correction (unlikely) that won't change.
Title: Re: Private Clubs at a Crossroads
Post by: Rob Marshall on November 07, 2023, 06:20:51 PM
I had a long conversation with my buddy on this topic last year when we were touring England and discussing the UK model vs. the US.


Both of us are Gen X. He's mid-50's, I'm mid-40's. He has no kids, I have one. We both do pretty well career wise, are quite modest in our housing and don't expect to move soon, so can certainly afford golf as a luxury. We would be the ideal demographic for a private club.


I live in south Orange County, CA and he lives in Nashville, TN. In both locations, the high end public golf offerings surpass the private golf offerings. There is nothing architectural of note in either location, neither of us care about a pool or tennis courts or a fancy clubhouse, so why would we spend $50-100k on initiation and $10k a year of our golf budget on one decent but unremarkable golf course vs. a 'club card' at a high end public course(s)- leaving thousands a year to spend on travel for golf?


Even if could get over the initiation and was happy playing the same course twice a week every week, 100 times in a year, the value proposition still falls short. The golf courses are simply not good enough to justify the expense. Unless there's a price correction (unlikely) that won't change.


I don’t think anyone thinks being a member at a private club saves on a per round basis. What you are paying for is convenience more than anything else.
Title: Re: Private Clubs at a Crossroads
Post by: Daryl David on November 07, 2023, 06:51:42 PM
I had a long conversation with my buddy on this topic last year when we were touring England and discussing the UK model vs. the US.


Both of us are Gen X. He's mid-50's, I'm mid-40's. He has no kids, I have one. We both do pretty well career wise, are quite modest in our housing and don't expect to move soon, so can certainly afford golf as a luxury. We would be the ideal demographic for a private club.


I live in south Orange County, CA and he lives in Nashville, TN. In both locations, the high end public golf offerings surpass the private golf offerings. There is nothing architectural of note in either location, neither of us care about a pool or tennis courts or a fancy clubhouse, so why would we spend $50-100k on initiation and $10k a year of our golf budget on one decent but unremarkable golf course vs. a 'club card' at a high end public course(s)- leaving thousands a year to spend on travel for golf?


Even if could get over the initiation and was happy playing the same course twice a week every week, 100 times in a year, the value proposition still falls short. The golf courses are simply not good enough to justify the expense. Unless there's a price correction (unlikely) that won't change.


I don’t think anyone thinks being a member at a private club saves on a per round basis. What you are paying for is convenience more than anything else.


Besides convenience there is also a sense of community. Playing in regular games. Speedy rounds. Playing a short loop of holes in the evening. Practicing to your hearts content on days you don’t play. Belonging rather than visiting. You are a member not a customer. Sometimes part of the ownership. There is much more to being the member of a private club than can be calculated in a cost per round analysis.
Title: Re: Private Clubs at a Crossroads
Post by: Tim_Weiman on November 07, 2023, 08:25:27 PM
I had a long conversation with my buddy on this topic last year when we were touring England and discussing the UK model vs. the US.


Both of us are Gen X. He's mid-50's, I'm mid-40's. He has no kids, I have one. We both do pretty well career wise, are quite modest in our housing and don't expect to move soon, so can certainly afford golf as a luxury. We would be the ideal demographic for a private club.


I live in south Orange County, CA and he lives in Nashville, TN. In both locations, the high end public golf offerings surpass the private golf offerings. There is nothing architectural of note in either location, neither of us care about a pool or tennis courts or a fancy clubhouse, so why would we spend $50-100k on initiation and $10k a year of our golf budget on one decent but unremarkable golf course vs. a 'club card' at a high end public course(s)- leaving thousands a year to spend on travel for golf?


Even if could get over the initiation and was happy playing the same course twice a week every week, 100 times in a year, the value proposition still falls short. The golf courses are simply not good enough to justify the expense. Unless there's a price correction (unlikely) that won't change.
Phil,


I have lived in both Southern California (Belmont Shore, Long Beach) and Nashville (Franklin) and share your feelings about private golf offerings in both places. Neither had anything I considered appealing.
Title: Re: Private Clubs at a Crossroads
Post by: Philip Caccamise on November 07, 2023, 11:39:15 PM
I had a long conversation with my buddy on this topic last year when we were touring England and discussing the UK model vs. the US.


Both of us are Gen X. He's mid-50's, I'm mid-40's. He has no kids, I have one. We both do pretty well career wise, are quite modest in our housing and don't expect to move soon, so can certainly afford golf as a luxury. We would be the ideal demographic for a private club.


I live in south Orange County, CA and he lives in Nashville, TN. In both locations, the high end public golf offerings surpass the private golf offerings. There is nothing architectural of note in either location, neither of us care about a pool or tennis courts or a fancy clubhouse, so why would we spend $50-100k on initiation and $10k a year of our golf budget on one decent but unremarkable golf course vs. a 'club card' at a high end public course(s)- leaving thousands a year to spend on travel for golf?


Even if could get over the initiation and was happy playing the same course twice a week every week, 100 times in a year, the value proposition still falls short. The golf courses are simply not good enough to justify the expense. Unless there's a price correction (unlikely) that won't change.


I don’t think anyone thinks being a member at a private club saves on a per round basis. What you are paying for is convenience more than anything else.


Besides convenience there is also a sense of community. Playing in regular games. Speedy rounds. Playing a short loop of holes in the evening. Practicing to your hearts content on days you don’t play. Belonging rather than visiting. You are a member not a customer. Sometimes part of the ownership. There is much more to being the member of a private club than can be calculated in a cost per round analysis.


I get all of those at my public course (10 minutes away). Pace of play is 4 hours every day and I can play a 12 hole loop in the evening in 2 hours. There's a robust men's club with weekly games as well. The range is giant and always has spots- the closest private course to me (5 minutes away, bad golf course, carts mandatory) doesn't have a range at all. The second closest private course (7 minutes away, good golf course) has a nice practice facility but the range is into a steep hill, so it's sort of limited flight.

Don't get me wrong- I would love to be a member of a club. Just not where I live based on what I'm getting for money or the alternative. If I ever live in the UK I'll join like 9 clubs because the value proposition is obscenely good.
Title: Re: Private Clubs at a Crossroads
Post by: John Bouffard on November 08, 2023, 11:32:42 AM
I didn't realize the thread started in 2019. I suppose someone has already mentioned that private clubs have done pretty damn well in the last couple of years. Clubs I know in my area have had huge influxes of younger members, maybe mostly GenX but certainly ALOT of millenials. Still, I think the future of golf probably lies in modified games, probably simulator based, but who knows. The next generation, whatever it's called, is populated by people who spend hours with their eyeballs in screens, and take their leisure in 15 second looped video shorts. Can't imagine 4 hour golf rounds followed by lunch at the club will capture this generation. Again, who knows.
Title: Re: Private Clubs at a Crossroads
Post by: John Handley on November 08, 2023, 03:29:54 PM
If you are debating on joining a golf/country club and are trying to make the numbers makes sense as in price per round, etc. then you are better of playing public courses.  Private clubs are like expensive cars/watches, whatever you want to say.  Financially, they probably do not make sense.  But it's more of a passion or lifestyle.  Like others have said, when you are part of a club, you make new friends and make your social circle larger.  That has value to me.  I can go play 3, 6, 9, 12, 18 or 36 holes and not worry about what I am paying.  That to me has value.  I know many guys who have had this dilemma and end up using the club way more than they ever factored into the spreadsheet when they were trying to make the decision.


A Toyota Camry is a nice car and gets you from point A to B.  Does it make sense to buy a Ferrari?  To some it does and to some it doesn't.


Playing a muni allows you to play golf at a pretty low cost.  Does it make sense to join a private club?  To some it does and to some it doesn't.


Everyone has different financial situations and I respect that.  But for others to say it doesn't make sense to join a club, I disagree. It just depends on your situation. 
Title: Re: Private Clubs at a Crossroads
Post by: Chris Hughes on November 09, 2023, 07:50:03 AM
I didn't realize the thread started in 2019. I suppose someone has already mentioned that private clubs have done pretty damn well in the last couple of years. Clubs I know in my area have had huge influxes of younger members, maybe mostly GenX but certainly ALOT of millenials. Still, I think the future of golf probably lies in modified games, probably simulator based, but who knows. The next generation, whatever it's called, is populated by people who spend hours with their eyeballs in screens, and take their leisure in 15 second looped video shorts. Can't imagine 4 hour golf rounds followed by lunch at the club will capture this generation. Again, who knows.


Almost feels like a bubble huh?
Title: Re: Private Clubs at a Crossroads
Post by: Tim Martin on November 09, 2023, 08:50:17 AM
I didn't realize the thread started in 2019. I suppose someone has already mentioned that private clubs have done pretty damn well in the last couple of years. Clubs I know in my area have had huge influxes of younger members, maybe mostly GenX but certainly ALOT of millenials. Still, I think the future of golf probably lies in modified games, probably simulator based, but who knows. The next generation, whatever it's called, is populated by people who spend hours with their eyeballs in screens, and take their leisure in 15 second looped video shorts. Can't imagine 4 hour golf rounds followed by lunch at the club will capture this generation. Again, who knows.


Almost feels like a bubble huh?


It does and it remains to be seen what the shakeout will be. Those clubs that got the greediest as far as dues and initiation increases will be in the crosshairs. I’m not saying it will happen across the board but those that were on the margins before Covid will get a wake up call.
Title: Re: Private Clubs at a Crossroads
Post by: Rob Marshall on November 09, 2023, 11:39:15 AM
With people working from home and fleeing to Southern states I don't see those areas seeing any decreases in the near term.
Title: Re: Private Clubs at a Crossroads
Post by: Wayne_Kozun on November 13, 2023, 03:27:45 PM
WFH makes it easier for people to get out to the golf course which means it can make more sense to get out to the club.  WFH on Friday, with a 3pm tee time no one will know that you are skipping out early.
Title: Re: Private Clubs at a Crossroads
Post by: Matt MacIver on November 14, 2023, 10:03:44 AM
For most of the golfers I know, playing a well conditioned course (public or private) far outweighs the available golf courses architectural merits.  There are a lot of other things already mentioned that weigh into a golfers decision to play a course or whether or not to join a club. 
Title: Re: Private Clubs at a Crossroads
Post by: Chris Hughes on May 30, 2024, 12:26:30 AM
"How much debt is ok - I would say about 1.5x revenue is manageable when things slow down, debt over 2.5x revenue is when things get risky and interest is too big a part of the cash put towards serving the debt each year."



For a private club, that seems very high.  If successful clubs are worth around 2.0x revenue or so, you're looking at an LTV of 75% - over 100%.  60% LTV is about the max I would go.  For a member owned club, 1X revenue might be too much.  With interest, that would put your debt service at around 10% of revenue.  Not chump change.


And don't forget about equipment leases!  That is also debt.  Everyone always forgets about equipment leases.


Good points all.  Agree on 1X being the prudent ceiling. 
Title: Re: Private Clubs at a Crossroads
Post by: Carl Johnson on May 31, 2024, 08:33:24 AM
If you are debating on joining a golf/country club and are trying to make the numbers makes sense as in price per round, etc. then you are better of playing public courses.  Private clubs are like expensive cars/watches, whatever you want to say.  Financially, they probably do not make sense.  But it's more of a passion or lifestyle.  Like others have said, when you are part of a club, you make new friends and make your social circle larger.  That has value to me.  I can go play 3, 6, 9, 12, 18 or 36 holes and not worry about what I am paying.  That to me has value.  I know many guys who have had this dilemma and end up using the club way more than they ever factored into the spreadsheet when they were trying to make the decision.


A Toyota Camry is a nice car and gets you from point A to B.  Does it make sense to buy a Ferrari?  To some it does and to some it doesn't.


Playing a muni allows you to play golf at a pretty low cost.  Does it make sense to join a private club?  To some it does and to some it doesn't.


Everyone has different financial situations and I respect that.  But for others to say it doesn't make sense to join a club, I disagree. It just depends on your situation.


Agreed on what you want and what you want to spend your money for.  Some folks are more interested in the golf than the clubhouse, and for others it's the other way around, and then there are the in-betweeners.